- T1135 asks Canadian residents — and certain corporations, trusts, and partnerships — to disclose "specified foreign property" they held at any time during the tax year, once the total…
- The CRA sets the exact dollar threshold that separates the two methods, and it is not one that changes often — but because it can be revised, always confirm the current figure in the…
- Add up the cost amount — generally what you paid, not today's market value — of every specified foreign property you held at any point in the year, across all accounts and holdings.
If you hold foreign bank accounts, foreign investments, or rental property outside Canada, you may need to file Form T1135, the Foreign Income Verification Statement, with your tax return. What surprises a lot of people is that T1135 isn't one-size-fits-all — the CRA offers a simplified reporting method and a more demanding detailed method, and which one you're allowed to use depends on how much specified foreign property you held during the year.
Getting this wrong in either direction causes problems. File the shorter version when the detailed one was required, and your return is incomplete. Spend hours itemizing every holding when the simplified method would have done, and you've wasted time you didn't need to. This guide walks through how the two methods differ and how to figure out which applies to your situation.
What Form T1135 Covers
T1135 asks Canadian residents — and certain corporations, trusts, and partnerships — to disclose "specified foreign property" they held at any time during the tax year, once the total cost amount of that property crosses the filing threshold. Specified foreign property generally includes:
- Foreign bank accounts and foreign-currency holdings
- Shares of foreign corporations, and foreign bonds or debt, held outside a Canadian registered account
- Interests in foreign trusts
- Foreign rental real estate
It does not generally include property you use personally rather than to earn income (a vacation property you never rent out, for example), or property held inside a Canadian-administered RRSP, RRIF, or TFSA.
Simplified vs. Detailed: The Two Methods Compared
| Simplified Method | Detailed Method | |
|---|---|---|
| Who can use it | Taxpayers whose total cost amount of specified foreign property for the year stays below the applicable threshold | Taxpayers whose foreign property cost amount reaches or exceeds that threshold |
| What you report | Foreign property grouped by broad category and by country, with combined totals | Each property or account listed individually, with country, maximum cost during the year, year-end cost, income earned, and any gain or loss on disposition |
| Record-keeping | Still required in full — you need the underlying detail even though you're only reporting totals | Required, and reported at the same level of detail you keep |
| Time to prepare | Generally faster | Generally slower, especially with several accounts or properties |
The CRA sets the exact dollar threshold that separates the two methods, and it is not one that changes often — but because it can be revised, always confirm the current figure in the T1135 instructions before you decide which method to use, rather than relying on a prior year's number.
How to Work Out Which Method Applies to You
- Add up the cost amount — generally what you paid, not today's market value — of every specified foreign property you held at any point in the year, across all accounts and holdings.
- Compare that total to the current threshold. Below it, the simplified method is available. At or above it, you must use the detailed method.
- Recheck every year. The method you're entitled to use is determined year by year based on that year's holdings, not by what you used last year.
- If you're close to the line, treat it as a detailed-method year and keep the fuller records — a borderline year is exactly when a small valuation error can put you on the wrong side of the threshold.
What Happens If You Use the Wrong Method — or Skip Filing Altogether
Filing T1135 using the simplified method when the detailed method was required generally means your return is treated as incomplete for that form, and the CRA can ask you to correct it. Foreign-property reporting is also one of the factors that can draw CRA's attention to a return for audit or review. The Income Tax Act allows penalties for a late, incomplete, or false T1135 — the amount depends on the specifics of the failure and can increase for repeated or knowing non-compliance. Because these figures are fact-specific and can change, don't estimate your exposure yourself; confirm it with a professional before you assume the cost of getting it wrong.
Frequently asked questions
Does my vacation property in Florida count toward the T1135 threshold?
If you use the property personally and don't rent it out to earn income, it's generally treated as personal-use property and excluded from specified foreign property altogether. Once you start renting it out, that can change — confirm how your specific use is treated before assuming either way.
Do TFSAs or RRSPs held in Canada count as foreign property?
No. Registered accounts administered in Canada, like RRSPs, RRIFs, and TFSAs, are not specified foreign property even if the investments inside them include foreign shares.
I qualified for the simplified method but filed the detailed one by mistake. Is that a problem?
Generally no — providing more detail than required isn't itself a compliance issue, though it does mean extra work. The concern runs the other way: using the simplified method when the detailed one was required.
Can I use the simplified method one year and need the detailed method the next?
Yes. Your holdings are assessed fresh each tax year, so which method is available to you can change from year to year depending on the cost amount of foreign property you held.
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