Who has to file a T1135, and what counts toward the $100,000?
Your client files Form T1135 for 2026 if they're a Canadian resident whose specified foreign property cost more than $100,000 in total at any time in the year. Cost counts, not market value. Under $250,000 all year, the simplified Part A is allowed; at $250,000 or more, Part B's detailed listing is required. It's due with the return.
What counts toward the $100,000 and what does not
The test comes from the definition of specified foreign property in subsection 233.3(1) of the Income Tax Act, which lists what's in and then carves out what's excluded laws-lois.justice.gc.ca. The CRA's own list follows the same split
canada.ca.
| Property | Counts? | Why |
|---|---|---|
| Shares of a US or other foreign corporation held at a Canadian broker | Yes | A share of a nonresident corporation, wherever the broker sits |
| Units of a US listed ETF or US mutual fund trust | Yes | An interest in a nonresident trust; report the fund, not its holdings |
| Cash in a bank account outside Canada | Yes | Funds deposited or held outside Canada |
| Foreign bonds, mortgages and loans to nonresidents | Yes | Debt owed by a nonresident |
| Rental property abroad | Yes | Tangible property outside Canada not held mainly for personal use |
| Shares of a Canadian corporation held with a foreign agent | Yes | Property held outside Canada |
| Foreign insurance policies; precious metals and futures held outside Canada | Yes | Listed by the CRA as specified foreign property |
| Foreign shares or ETFs inside an RRSP or TFSA | No | Registered plan holdings are excluded |
| Canadian mutual funds that hold foreign stocks | No | The investor holds a Canadian fund, so there is nothing to report |
| Vacation property used mainly for personal enjoyment | No | Personal use property under section 54 |
| Art, jewellery and coins | No | Listed personal property, a kind of personal use property |
| Property used or held exclusively in an active business | No | Excluded by paragraph (j) of the definition |
| Shares of, or debt owed by, a foreign affiliate | No | Excluded by the definition |
The CRA confirms that shares of nonresident corporations are reportable whether they sit with a Canadian or a foreign broker, that RRSP and TFSA holdings are excluded, and that a vacation condo used more than 50% for personal enjoyment stays off the form while a foreign rental with a reasonable expectation of profit goes on it canada.ca. Currency doesn't decide anything: a US dollar holding isn't foreign property just because of the currency.
Who has to file
A Canadian resident individual, corporation or trust files if the total cost amount of its specified foreign property was more than $100,000 at any time in the year canada.ca. Nonresidents never file. Subsection 233.3(3) sets the due date as the filer's own filing due date for the year
laws-lois.justice.gc.ca.
Three details catch people. The test uses cost amount, generally the adjusted cost base, not fair market value, so a $90,000 portfolio that grew to $300,000 still doesn't trigger the form. The test is "at any time", so property sold before December 31 still counts, and once your client crosses the line they report every specified foreign property held during the year. And an individual doesn't file for the year they first became resident in Canada; after that, the cost amount is fair market value on the date they arrived canada.ca.
A partnership files when it's a specified Canadian entity, meaning its nonresident partners take less than 90% of its income or loss, and its specified foreign property cost more than $100,000 at any time. Partners of a filing partnership generally don't report their partnership interest. In a joint venture, each party tests its own share of the cost canada.ca. Mutual fund trusts, mutual fund corporations and registered investments are not specified Canadian entities, so they don't file
laws-lois.justice.gc.ca.
Worked example: crossing $100,000 and selling out
Your client holds these in a nonregistered account at a Canadian broker and a US bank during 2026 (all figures in Canadian dollars, at cost):
| Date | Event | Total cost of specified foreign property |
|---|---|---|
| January 1 | US shares costing $70,000, US bank account holding $20,000 | $90,000 |
| May 15 | Buys $15,000 more of US shares | $105,000 |
| October 1 | Sells all US shares; bank balance stays at $20,000 | $20,000 |
| December 31 | No change | $20,000 |
Total cost hit $105,000 in May, so your client files a 2026 T1135 even though only $20,000 is left at year end. The form covers the shares sold in October and the bank account. The maximum was under $250,000 all year, so Part A is available.
Change one fact: the January shares cost $70,000 but were worth $140,000 by May, and no new money went in. Total cost never passed $90,000, so no T1135 is due, whatever the market value.
Part A or Part B
The reporting method depends on the highest total cost during the year canada.ca.
| Highest total cost in the year | Method | What you report |
|---|---|---|
| $100,000 or less | No T1135 | Nothing on this form |
| Over $100,000 but under $250,000 throughout | Part A (simplified) or Part B | Part A: a box for each type of property, the top three countries, total income and total gain or loss |
| $250,000 or more at any time | Part B (detailed) | Each property separately, by category |
In the band between $100,000 and $250,000 your client can choose either part, but not both. For Part A, add up the month end cost by country and list the top three countries by highest month end cost canada.ca.
Under Part B, property held with a Canadian registered securities dealer or a Canadian trust company can go in category 7, aggregated by country, using the highest fair market value at any month end, the year end fair market value, the income and the gain or loss for the year canada.ca. Ask the dealer whether it qualifies. On either part, report gross income, not net, and the full capital gain or loss, not the taxable half
canada.ca.
Due dates and how to file
The T1135 is due on the filer's return due date, even when no return is otherwise required canada.ca.
| Filer | T1135 due |
|---|---|
| Individual | April 30 |
| Individual who, or whose spouse or common law partner, carried on a business | June 15 |
| Corporation | Six months after the fiscal period ends |
| Inter vivos trust | 90 days after December 31 |
| Partnership, all individual partners | March 31 after the calendar year the fiscal period ended |
| Partnership, all corporate partners | Five months after the fiscal period ends |
| Other partnerships | The earlier of the two partnership dates above |
Individuals and partnerships can EFILE or NETFILE it for 2017 and later years, corporations can EFILE for 2014 and later, and trusts can EFILE for 2021 and later. Paper filers attach it to the return or send it to the Winnipeg Tax Centre by the due date canada.ca. The current form is on the CRA's T1135 page
canada.ca.
What a missed or wrong T1135 costs
Filing late costs $25 a day for up to 100 days, with a $100 minimum and a $2,500 maximum, under subsection 162(7). A knowing or grossly negligent failure is $500 a month for up to 24 months, and past 24 months the penalty becomes 5% of the property's cost, less penalties already charged canada.ca. The full breakdown is on T1135 penalty.
The bigger risk is time. If your client omitted income from specified foreign property and the T1135 was late, inaccurate or never filed, the normal reassessment period is extended by three years canada.ca. See CRA reassessment period. For back years, the CRA points to the Voluntary Disclosures Program, and Form RC4288 is the route to ask for penalty relief.
Sources
Does a client with $300,000 of US stocks in a TFSA need to file?
No. Specified foreign property held in an RRSP or a TFSA is excluded from T1135 reporting, so only the client's nonregistered foreign holdings count toward the $100,000 canada.ca.
Do I report a US listed ETF by its underlying holdings?
No. Report the fund itself, with the United States as the country, not the shares it holds. A Canadian mutual fund trust or corporation that holds foreign stocks isn't reported at all canada.ca.
My client is under $100,000. Does their foreign income still go on the return?
Yes. A Canadian resident reports foreign income on the return whether or not the $100,000 threshold is met. The threshold only decides whether the T1135 itself is required canada.ca.
How is cost measured for an inherited foreign asset?
At fair market value on the date your client received it. The same rule applies to gifts and bequests, and that figure is what goes into the $100,000 test canada.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.