Is the CRA Making Tax Filing More Difficult With New T1135

Tax Headaches for T1135 Form

Many individuals, over the years have taken to foreign investments as a way to pad their income for their retirement years. Lately with the big stir about tax evasion through off shore accounts it has caused the Canadian Government to scrutinize where tax payers are investing their money outside of the country and how it relates to their taxes.

To help create better transparency with foreign investments the CRA updated the T1135.   You may have read our other articles where the Canada Government has talked about making things easier when it comes to filing taxes.   Well if this upgraded T1135 is any indication of this we should not get our hopes up too high.  The experts have identified several serious issues with this form and are asking the Government to reconsider.  It is felt that some of the requirements that the form stipulates will be impossible for the investor to comply with.


The form creates complex problems for tax payers who use different agents for holding identical properties.  Then the tax payer will have to provide a security by security report which demands a great deal of work on both the part of the taxpayer and the providers of the T5 slips.   Then there is the question about accuracy in regards to income adjustments.


There is no doubt that even at a quick glance that it is easy to see that this is going to be a potential nightmare for all the parties that are involved in foreign investment income.  This includes the tax payer, the agents, and even the tax preparers who have to sort out the complexity of this form.


Some foreign investors only do so in a limited capacity.  For example, they may only own one or two properties, while others such as corporations may own many.   It would seem that this new T1135 is going to create a whole gambit of potential problems at any investor level.


More Canadians are taking an interest in tax planning, and one area that they consider is foreign investment.  They see this as a way of financially securing their future. When the CRA makes this type of tax filing so complex many people simply give up on their potential tax planning interests as they feel it simply is not worth the hassle.   For many, just standard tax filing obligations are hard enough.


Rather than put tax planning aside it would be well worth seeking out a Toronto accountant that has the expertise in this area and can give you some guidance and advice as to what would be best for your particular financial situation.


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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant


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