Own foreign property, including stocks? Better tell the CRA on time or face a penalty

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Jamie Golombek: The penalty for late filing of the T1135 form is $25 per day to a maximum of $2,500, plus arrears interest

To make the task of identifying your reportable foreign holdings a bit easier, some brokerage firms will send you a foreign property report as part of their annual tax packages, which are typically sent out with the T5 tax slips in February. Each report may vary, but it typically groups foreign holdings and sorts them based on the country code of the security.

The latest case, decided in December 2021, involved a taxpayer who was assessed the maximum $2,500 penalty for filing his T1135 late. He filed his return and T1135 for the 2018 tax year on Aug. 24, 2019, even though the deadline for filing was April 30, 2019. As he was 116 days late, he was subjected to the maximum T1135 penalty.Article content

On Aug. 13, 2020, the taxpayer’s request for relief was denied by the CRA. He then sought a second review, adding that the basis for his relief was due to “ongoing health issues experienced by two family members.” He stated that engaging with those issues “became a priority for him and he was unable to find time for certain other activities such as filing his income tax.”

 

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