T1135 Foreign Income Verification Statement: Complete Guide 2026

1. What is the T1135?

The T1135 is an information return — not a form that creates extra tax in itself. It tells the Canada Revenue Agency (CRA) that you hold specified foreign property whose total cost exceeded CAD $100,000 at any point during the tax year.

The purpose is transparency: the CRA wants to know where Canadians hold foreign assets, verify that foreign income (dividends, interest, gains) is properly reported, and deter offshore tax evasion. The form must accompany your T1 individual income return — it is a separate filing requirement, on top of reporting the actual foreign income itself.

For the tax treatment of any gains or losses on your foreign holdings, see our guide on adjusted cost base and investment taxation.

2. Who must file?

You must file T1135 if you are a Canadian resident (individual, corporation, trust or partnership) and the total cost of all your specified foreign property exceeded CAD $100,000 at any point during the calendar year. Both conditions must be met at the same time.

The threshold is based on cost — your total adjusted cost base — not current market value. If you bought US shares for $115,000 CAD and they have since fallen to $90,000, you still had to file T1135 in the year of purchase (and every year thereafter while the cost stays above the threshold).

3. What counts as specified foreign property

Specified foreign property includes, among other things:

• Shares of foreign corporations held directly in a non-registered account (individual US, European or other foreign stocks);
• ETFs listed on foreign exchanges (e.g. VTI, VOO, QQQ listed on the NYSE or NASDAQ);
• Foreign currency cash (US dollars, euros, etc.) in a non-registered account;
• Foreign bonds and debt obligations;
• Units of foreign investment funds not listed on a Canadian exchange;
• Deposits held at foreign financial institutions (e.g. a US bank account);
• Real property located outside Canada used for rental or investment purposes.

4. What does NOT count as specified foreign property

Several categories are excluded from the $100,000 calculation — and this is where many investors get confused:

• Any property held inside a registered account: RRSP, TFSA, RRIF, RESP, LIRA, FHSA — investments inside these accounts are entirely excluded, even if they consist of US stocks or US-listed ETFs;
• Canadian-listed ETFs that invest abroad: a fund such as XEQT, VFV, VEQT or XUU — listed on the Toronto Stock Exchange (TSX) and administered by a Canadian company — is treated as Canadian property. What it holds internally is irrelevant;
• Personal-use real property located outside Canada (e.g. a vacation property in the US used exclusively for personal use);
• Shares of controlled foreign affiliates (separate regime for businesses);
• Property used exclusively in an active business.

5. Simplified method vs detailed method

T1135 offers two ways to report your holdings:

Simplified method (Part A)

Available when the total cost of your specified foreign property was below CAD $250,000 throughout the entire year. You report by category (funds held at foreign financial institutions, shares of foreign corporations, foreign debt instruments, real property, other) without listing each individual holding. This is significantly less work and covers the vast majority of individual investors.

Detailed method (Part B)

Required if the total cost exceeded CAD $250,000 at any point during the year. You must report each holding separately: the name of the issuer or a description of the property, the country, the maximum cost during the year, the cost at year-end, income earned (dividends, interest), and any gain or loss on disposition. More demanding, but the threshold is high enough that most individual investors stay in the simplified method.

6. The filing deadline

T1135 is due on the same date as your T1 income tax return:

• April 30 for most taxpayers (or the next business day if that date falls on a weekend);
• June 15 for self-employed individuals (and their spouses or common-law partners) — but any balance of tax owing is still due by April 30.

If you file your T1 late and you were required to file T1135, the T1135 will also be considered late. File both at the same time to avoid a double penalty.

7. Penalties for not filing or filing late

Forgetting the T1135 can be costly. The CRA can impose:

• $25 per day late, up to a maximum of $2,500 for a standard late filing;
• If the CRA sends a demand to file and you still don't comply: an additional penalty of $500 per month, for up to 12 months (up to $6,000 more);
• In cases of gross negligence or willful omission: a penalty of up to 5% of the cost of all unreported property, with a minimum of $24,000 — a potentially very large amount for a sizable portfolio;
• Interest accrues on unpaid penalties.

If you missed T1135 for prior years, the CRA's Voluntary Disclosures Program (VDP) may allow you to come into compliance with reduced penalties under certain conditions. Consult a tax professional before initiating that process.

8. Worked example: Marie and her non-registered portfolio

Marie is a Canadian resident. In 2026, she holds the following in a non-registered account at a Canadian broker:

• Shares of Microsoft Corp. (listed on NASDAQ), purchased for CAD $48,000;
• ETF VTI (listed on the NYSE), purchased for CAD $55,000;
• USD $3,000 in cash (approximately CAD $4,200 at the prevailing rate).

Total cost of specified foreign property: $48,000 + $55,000 + $4,200 = CAD $107,200. Marie exceeds the $100,000 threshold and must file T1135. Since her total stays below $250,000, she can use the simplified method.

Her RRSP holds XEQT and her TFSA holds VFV — neither counts: XEQT and VFV are Canadian-listed ETFs (excluded regardless of account), and both accounts are registered (double exclusion anyway).

For how the US withholding tax on VTI dividends applies across account types, see our article on the 15% US dividend withholding tax.

9. Practical tips to stay on top of it

• Track the cost of each foreign position in your non-registered account — in Canadian dollars, at the date of purchase. Keeping an accurate ACB is necessary anyway for capital gains reporting (see our ACB guide).
• Check early in the year whether your total cost approached or exceeded $100,000 at any point during the prior year — not just at December 31.
• Don't forget foreign cash: US dollar balances sitting in a non-registered account count toward the threshold.
• File even if you made no transactions: T1135 is required as soon as the threshold is reached, regardless of whether you bought or sold anything during the year.
• If you are approaching the threshold, consider whether moving foreign assets into an RRSP or TFSA makes sense — doing so removes them from the non-registered cost calculation and may bring you under $100,000. A tax advisor can help assess the implications, including whether a currency conversion via Norbert's Gambit is appropriate.
• Keep in mind that Canadian dividends in a non-registered account receive preferential tax treatment compared to foreign dividends — see our Canadian dividend tax credit guide for the details.

Frequently Asked Questions

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