We wish to remind you that the significantly revised form T1135 disclosing ownership details of foreign assets is due for the first time with respect to taxation years ending after June 30, 2013. There have been two new provisions announced since we last commented on the changes to T1135. Both are applicable to 2013 taxation years ONLY.
Firstly, the due date for form T1135, which normally coincides with the due date for the income tax return, has been extended to July 31, 2014 for all taxpayers.
The second pronouncement provides that taxpayers may opt to report under a transitional rule which applies to foreign property held in an account with a Canadian securities dealer (note that even if a foreign share or bond is held in a Canadian brokerage account, the security is still considered to be foreign, and therefore subject to reporting on the T1135). Instead of reporting the details of each foreign security in the account or claiming an exemption on that security due to T3/T5 income being reported, the transitional rule states that the combined value for all foreign property in the account may be reported. If reporting under the transitional rule has been selected for any account, that rule must be used in reporting for all accounts held through Canadian securities dealers.
The onerous nature of the additional information required for the new T1135 has already been described in a previous issue so will not be repeated here. However, if you have not already done so, we would urge you to contact your broker or investment adviser immediately to gather the necessary information to complete the form.
Tax Target – What’s New in the Tax Sector
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