Apr 19, 2021
As you may know, we have supported a request to the CRA to extend the April 30 deadline to June 15. But if the deadline is NOT extended, here are some practical tips to reduce the burden of a COVID tax season.
“Form T1135 includes a certificate of full disclosure to be signed by the taxpayer.”
The current T1 General tax return has a yes/no question:
“Did you own or hold foreign property at any time in 2009 with a total cost of more than CAN$100,000?”
Two particular points to note are “at any time in 2009” and “total cost.” The latter means that you have to report all foreign properties if their total cost exceeds $100,000 at any time in 2009.
If the answer is “yes,” Form T1135 – “Foreign Income Verification Statement” must be filed. The form requires categorization of each type of property and also includes a requirement to report the total income which was reported on the T1 return from the foreign property.
The explanations on the form are important. Highlighted below are some key points, but a careful review of the detailed explanations is essential.
Property that must be reported include:
and a number of other items.
Specific exclusions from reporting are listed. The most important are personal-use property, an interest in a foreign affiliate and property used in an active business.
Form T1135 includes a certificate of full disclosure to be signed by the taxpayer, with the annotation “It is a serious offence to file a false statement.”
Very severe penalties are provided for failure to file the form, for making false statements, omissions, etc. They range from $25 per day, minimum $100, to a maximum of $2,400. In certain circumstances there is a further penalty of $500 per month, maximum $24,000. A total penalty of 5% of the unreported amounts may apply after 24 months.
TAX TIP OF THE WEEK is provided as a free service to clients and friends of the Tax Specialist Group member firms. The Tax Specialist Group is a national affiliation of firms who specialize in providing tax consulting services to other professionals, businesses and high net worth individuals on Canadian and international tax matters and tax disputes.
The material provided in Tax Tip of the Week is believed to be accurate and reliable as of the date it is written. Tax laws are complex and are subject to frequent change. Professional advice should always be sought before implementing any tax planning arrangements. Neither the Tax Specialist Group nor any member firm can accept any liability for the tax consequences that may result from acting based on the contents hereof.
TAX TIP is provided as a free service to clients and friends of Cadesky Tax.
The material provided in Tax Tip is believed to be accurate and reliable as of the date of posting. Tax laws are complex and are subject to frequent change. Professional advice should always be sought before implementing any tax planning arrangements. Cadesky Tax cannot accept any liability for the tax consequences that may result from acting based on the contents hereof.