Canadian T1135 Reporting for Part-Year Residents
Moderator: Mark T Serbinski CA CPA
Canadian T1135 Reporting for Part-Year Residents
COPIED AND PASTED.
"Canadian T1135 Reporting for Part-Year Residents
As a general rule, Canadian residents need to file form T1135 with the CRA for any year in which the total “cost amount” of “specified foreign property” exceeds $100,000 at any time in that year[1].
Depending on the circumstances, this form requires various levels of information to be reported with respect to transactions in connection with such properties during the relevant year.
But what about a situation in which the taxpayer is not resident in Canada for the entire year? Does the CRA reporting have to include transactions (sales, purchases) for the part of the year that the taxpayer is not resident in Canada?
In this regard, a literal reading of the Act and the form would suggest that the answer is “yes”. The taxation year of a natural person is always the calendar year. There is no deemed year-end on emigration or immigration, although the income earned in the nonresident portion of the year is generally not taxable in Canada[2].
Given that, it is comforting and refreshing to see the CRA taking a very common sense administrative position in a Technical Interpretation regarding an emigrating taxpayer (CRA Document 2014-052937). Based on that interpretation, transactions after emigration need not be reported, and the closing balance of the taxpayer’s investments should be treated as “NIL”.
But what about the reverse situation: a taxpayer becomes a Canadian resident during the year. In most cases, the issue is moot because of the general exemption from T1135 reporting for the first year of residency[3]. However, the issue is still relevant for a returning Canadian expat, since the exemption would not apply in that case.
One would think that the CRA would adopt an analogous position in such cases, and allow transactions prior to immigration to be excluded. However, curiously, in CRA document 2015-0611141E5, the CRA seems to take a position that is based on a literal reading of the Act. They require reporting in such circumstances for the entire calendar year.
[1] Section 233.3 of the Income Tax Act (“the Act”)
[2] As per section 114 of the Act, assuming not “taxable income earned in Canada”
[3] Section 233.7 "
I copied this text ........... I know we have to report funds >$100,000 to CRA that is located in USA on form T 1135, we would report our bank account and I think HSA ???? that will be maintained in USA, I thought that we did not have to report in the first year as a canadian resident...if we move July 2020, then on our 2021 Canadian tax return we not not file a T1135, since that is our first canadian tax return, however we would file T1135 for following years moving on.
However after reading this text it looks like the first year non reporting only applies to new Canadian residents
and not returning Canadian citizens (expats)...........am I reading this correctly ?
" However, the issue is still relevant for a returning Canadian expat, since the exemption would not apply in that case."
Do any returning Canadian citizens have any experience with this ???? If we have to file a T1135 its no problem, I just want to know if we have to file. I would definitely rather over report than not report any necessary forms.
We are dual citizens USA/Canada .
Thank you for any input
"Canadian T1135 Reporting for Part-Year Residents
As a general rule, Canadian residents need to file form T1135 with the CRA for any year in which the total “cost amount” of “specified foreign property” exceeds $100,000 at any time in that year[1].
Depending on the circumstances, this form requires various levels of information to be reported with respect to transactions in connection with such properties during the relevant year.
But what about a situation in which the taxpayer is not resident in Canada for the entire year? Does the CRA reporting have to include transactions (sales, purchases) for the part of the year that the taxpayer is not resident in Canada?
In this regard, a literal reading of the Act and the form would suggest that the answer is “yes”. The taxation year of a natural person is always the calendar year. There is no deemed year-end on emigration or immigration, although the income earned in the nonresident portion of the year is generally not taxable in Canada[2].
Given that, it is comforting and refreshing to see the CRA taking a very common sense administrative position in a Technical Interpretation regarding an emigrating taxpayer (CRA Document 2014-052937). Based on that interpretation, transactions after emigration need not be reported, and the closing balance of the taxpayer’s investments should be treated as “NIL”.
But what about the reverse situation: a taxpayer becomes a Canadian resident during the year. In most cases, the issue is moot because of the general exemption from T1135 reporting for the first year of residency[3]. However, the issue is still relevant for a returning Canadian expat, since the exemption would not apply in that case.
One would think that the CRA would adopt an analogous position in such cases, and allow transactions prior to immigration to be excluded. However, curiously, in CRA document 2015-0611141E5, the CRA seems to take a position that is based on a literal reading of the Act. They require reporting in such circumstances for the entire calendar year.
[1] Section 233.3 of the Income Tax Act (“the Act”)
[2] As per section 114 of the Act, assuming not “taxable income earned in Canada”
[3] Section 233.7 "
I copied this text ........... I know we have to report funds >$100,000 to CRA that is located in USA on form T 1135, we would report our bank account and I think HSA ???? that will be maintained in USA, I thought that we did not have to report in the first year as a canadian resident...if we move July 2020, then on our 2021 Canadian tax return we not not file a T1135, since that is our first canadian tax return, however we would file T1135 for following years moving on.
However after reading this text it looks like the first year non reporting only applies to new Canadian residents
and not returning Canadian citizens (expats)...........am I reading this correctly ?
" However, the issue is still relevant for a returning Canadian expat, since the exemption would not apply in that case."
Do any returning Canadian citizens have any experience with this ???? If we have to file a T1135 its no problem, I just want to know if we have to file. I would definitely rather over report than not report any necessary forms.
We are dual citizens USA/Canada .
Thank you for any input
Re: Canadian T1135 Reporting for Part-Year Residents
I didn't bother to read all your post, but be assured that "first year of residency" applies ANYTIME one was NOT a resident in the previous year. You are a "newcomer" where or not you ever lived in Canada of not, or are a citizen or not, so the exemption applies/
And when "pasting" info out of context, at least paste the source.
And when "pasting" info out of context, at least paste the source.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Canadian T1135 Reporting for Part-Year Residents
Sorry I was rushing,
I read this information from Micheal Atlas posted June 2017 in Alerts News,
Thanks for the information.
I read this information from Micheal Atlas posted June 2017 in Alerts News,
Thanks for the information.
Re: Canadian T1135 Reporting for Part-Year Residents
A url would be appropriate.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Canadian T1135 Reporting for Part-Year Residents
sorry about not posting that in the first place,
when I read it over it seemed like a the exemption did not apply to returning canadians, but what you mentioned make perfect sense..thanks again.
when I read it over it seemed like a the exemption did not apply to returning canadians, but what you mentioned make perfect sense..thanks again.
Re: Canadian T1135 Reporting for Part-Year Residents
by nelsona » Wed Apr 26, 2017 4:47 pm
skoper, which is it? On your other thread you said you moved to Canada in July 2016. Now you are saying you moved in 2015.
As to filing. CRA has clarified that T1135 is not required only in a year when someone moves to Canada. RETURNING taxpayers must still file.
https://www.cpacanada.ca/-/media/site/o ... .pdf?la=en.
There is no exception for property owned when an individual becomes a Canadian resident. Section 233.7 exempts individuals (other than trusts) from filing Form T1135, among other disclosures, for the year in which they first become resident in Canada. However, former residents returning to Canada are required to file Form T1135 in the year of their return.
http://jltax.ca/2017/03/t1135-part-year-resident/
In CRA technical interpretation 2015-0611141E5 (July 11, 2016), the CRA stated that a T1135 filed for a part-year resident should report property and transactions relating to the property for the person’s entire year that includes the time when the person became a resident. The analysis of whether the person must file a T1135, however, does not take into account property owned only while the person was a non-resident.
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.
after some research I found more information with regards to former residents returning to Canada.
skoper, which is it? On your other thread you said you moved to Canada in July 2016. Now you are saying you moved in 2015.
As to filing. CRA has clarified that T1135 is not required only in a year when someone moves to Canada. RETURNING taxpayers must still file.
https://www.cpacanada.ca/-/media/site/o ... .pdf?la=en.
There is no exception for property owned when an individual becomes a Canadian resident. Section 233.7 exempts individuals (other than trusts) from filing Form T1135, among other disclosures, for the year in which they first become resident in Canada. However, former residents returning to Canada are required to file Form T1135 in the year of their return.
http://jltax.ca/2017/03/t1135-part-year-resident/
In CRA technical interpretation 2015-0611141E5 (July 11, 2016), the CRA stated that a T1135 filed for a part-year resident should report property and transactions relating to the property for the person’s entire year that includes the time when the person became a resident. The analysis of whether the person must file a T1135, however, does not take into account property owned only while the person was a non-resident.
Nelsona Non grata. Non pro. Search previous posts. Taking period between now and June off. Will only answer sporadically.
after some research I found more information with regards to former residents returning to Canada.
Re: Canadian T1135 Reporting for Part-Year Residents
Hi,
I dont want to seem disrespectful by posting the previous post, but its not clear ,the previous post says returning Canadians have to file T1135 in the yr they return.
sorry if I am offending ,that is definitively not my intention, I really appreciate all the tip and great information from this site and its members.
I dont want to seem disrespectful by posting the previous post, but its not clear ,the previous post says returning Canadians have to file T1135 in the yr they return.
sorry if I am offending ,that is definitively not my intention, I really appreciate all the tip and great information from this site and its members.
Re: Canadian T1135 Reporting for Part-Year Residents
Fine. I try not to remember anything about that form because the rules changes WILDLY (in terms of tax rules) every year.
Determine what you need to do in the spring after you return to Canada. My point was that it is no different whether you are new or former resident.
Determine what you need to do in the spring after you return to Canada. My point was that it is no different whether you are new or former resident.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Canadian T1135 Reporting for Part-Year Residents
I guess we will need to file when we RETURN, if we meet the threshold.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Canadian T1135 Reporting for Part-Year Residents
It appears CRA does not make anything easy , like I said everything I read said no filing for the first year, then I started digging deeper which always,always ends in more questions than answers !
We have a appointment with a cross boarder accountant in 2 weeks times, I just wanted to ask him questions with regards to the move etc...I will definitely
ask him this question and get a answer from him.....I will post my findings.
again, I meant no disrespect by all this.
thank you again.
We have a appointment with a cross boarder accountant in 2 weeks times, I just wanted to ask him questions with regards to the move etc...I will definitely
ask him this question and get a answer from him.....I will post my findings.
again, I meant no disrespect by all this.
thank you again.
Re: Canadian T1135 Reporting for Part-Year Residents
ok, I just got off the phone with CRA ( waited almost 50 mins)
I explained the situation about returning to Canada after 25 plus yrs , dual citizenship the whole lot.
The lady told me that the exemption for NOT filing T1135 only applies new immigrants to Canada and NOT returning expats, residents like us.
So we should file t1135 with the first tax return.
Having said that I know if I call later today, tomorrow, next week, I may get a different answer, I just wanted to share this information.
Again this is a question I will be asking the cross boarder accountant, I will also print out the article I founds etc.
I will post what he tells us.
have a great day.
I explained the situation about returning to Canada after 25 plus yrs , dual citizenship the whole lot.
The lady told me that the exemption for NOT filing T1135 only applies new immigrants to Canada and NOT returning expats, residents like us.
So we should file t1135 with the first tax return.
Having said that I know if I call later today, tomorrow, next week, I may get a different answer, I just wanted to share this information.
Again this is a question I will be asking the cross boarder accountant, I will also print out the article I founds etc.
I will post what he tells us.
have a great day.
Re: Canadian T1135 Reporting for Part-Year Residents
No, looks like my original answer, several years ago, still applies, you will have to file T1135, if you meet the thresholds.
I wouldn't waste anymore time on this issue, since it is merely a form, nothing to get worked up about. Like FBAR.
I wouldn't waste anymore time on this issue, since it is merely a form, nothing to get worked up about. Like FBAR.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Canadian T1135 Reporting for Part-Year Residents
thank you .
we will meet that threshold so we will just file.
we will meet that threshold so we will just file.
Re: Canadian T1135 Reporting for Part-Year Residents
I’m always confused between form T1135 and T776. If newcomers to Canada don’t have to report T1135 first year, do they still need to complete T776?