Form T1135 for Canadian Advisers: the CAD 100,000 Foreign Property Test

Published 30 October 2026 by Steffan Kharmaaiarvi, founder

Canadian residents who hold foreign investments outside registered plans may have to file Form T1135, the Foreign Income Verification Statement, with their return. The test is easy to state and easy to miss: it runs on cost rather than value, it catches US shares held at a Canadian broker, and it leaves out the Canadian-listed ETFs that many portfolios use for foreign exposure. Penalties for filing late accrue by the day. This note sets out the rule, a worked example and the points to check. It is decision support, not tax advice.

The rule

Under section 233.3 of the Income Tax Act and the CRA's questions and answers on Form T1135:

• Threshold. A T1135 is required when the total cost amount of the client's specified foreign property was more than CAD 100,000 at any time in the year.
• Method. If the total cost stayed below CAD 250,000 throughout the year, the simplified method applies. At CAD 250,000 or more at any time, the detailed method applies, property by property.
• What counts. Funds held outside Canada, shares of non-resident corporations wherever they are held (including at a Canadian broker), interests in non-resident trusts, debts owed by non-residents and foreign real property not for personal use.
• What does not. Property held in registered plans such as RRSPs and TFSAs, personal-use property, property used in an active business, and shares of Canadian corporations and units of Canadian mutual fund trusts, even when those funds invest abroad.

US-listed and Canadian-listed ETFs

A US-listed ETF such as VOO or IVV is a US entity, and units in it are treated as specified foreign property, as shares of a non-resident corporation or an interest in a non-resident trust. CRA's guidance does not name US-listed ETFs; this is an inference from the definition, and it is the conclusion practitioners generally reach. A Canadian-listed ETF that holds the same US shares is a Canadian fund and is not specified foreign property. The exposure is identical; the reporting is not.

Cost amount, in Canadian dollars

Cost amount is generally the adjusted cost base. A cost paid in a foreign currency is converted at the exchange rate when the property was bought, so a later move in the exchange rate does not change it. Near the threshold, the purchase-date rates decide the answer.

A worked example

A Canadian resident holds the following. Round illustrative figures, and an illustrative purchase rate of 1.30 CAD per USD:

• Specified foreign property: USD 80,000 of cost, or CAD 104,000 at the purchase rate. That is over CAD 100,000, so a T1135 is due, under the simplified method.
• At today's rate of, say, 1.38, the same cost shows as CAD 110,400. Here the answer is the same. With USD 75,000 of cost it would not be: CAD 97,500 at the purchase rate, below the threshold, but CAD 103,500 at today's rate.

Common mistakes

• Testing market value. A portfolio worth CAD 150,000 that cost CAD 90,000 is below the threshold.
• Treating a Canadian broker as making a holding Canadian. Shares of a US company are foreign property wherever they sit.
• Counting Canadian-listed ETFs of foreign shares. They are Canadian funds.
• Forgetting the rest. A US bank account, a foreign rental property or an account at a foreign broker adds to the same total.
• Looking only at 31 December. The test is at any time in the year; a holding sold in June still counts.

How Borderfolio for Advisors handles it

For a client resident in Canada, the Cross-Border page adds a foreign property finding:

• Non-Canadian holdings outside RRSPs and TFSAs. A holding counts when its ISIN is not Canadian; accounts marked with an RRSP or TFSA tax wrapper are left out.
• Cost, converted. The average cost on file is converted at today's rate, and the finding says that CRA uses the rates at purchase.
• Status and method. The result reads due, approaching (above three-quarters of the threshold) or below, and names the simplified or detailed method.
• Gaps shown. If a cost is missing, the finding says the test cannot be settled; holdings without an ISIN are listed as not classified.

Where the screen stops

• Today's exchange rate is used, not the rates at purchase, and the highest cost during the year is not tracked.
• Foreign bank accounts, property and assets outside the accounts on file are not included.
• Only accounts marked as RRSPs or TFSAs are excluded; check other registered accounts by hand. The form itself is not prepared.

The cross-border documentation lists what each screen leaves out. Sources: CRA, Questions and answers about Form T1135, Income Tax Act, s. 233.3.

Frequently asked questions

Is the T1135 threshold based on cost or market value?

Cost. The form is required when the total cost amount of specified foreign property was more than CAD 100,000 at any time in the year, whatever its market value.

Do US shares held at a Canadian broker count?

Yes. Shares of non-resident corporations are specified foreign property wherever they are held. Where the account is does not change that.

Are Canadian-listed ETFs that hold US stocks specified foreign property?

No. Units of a Canadian mutual fund trust and shares of a Canadian corporation are not specified foreign property, even when the fund invests abroad.

Does property in an RRSP or TFSA count?

No. Property held in registered plans such as RRSPs and TFSAs is excluded from the T1135 test.