T1135: Which Holdings Count and How to Fill In Part A or B

T1135: which holdings count?

A holding counts on Form T1135 when it is specified foreign property: money or property held outside Canada, shares of a non-resident corporation, an interest in a non-resident trust, a debt owed by a non-resident, or a right to acquire any of these (Income Tax Act, s. 233.3). Where the property sits and who issued it decide, subject to the Act's exclusions, such as personal-use property. The currency does not (CRA Q&A).

You file only if the total cost of all your specified foreign property was more than $100,000 at any time in the year. Who files, the deadline, the penalties and when Part A is allowed are in foreign property and affiliate reporting.

A case is not simple when the account is joint or funded by a spouse, when employer equity is involved, when past years were filed wrong or not at all, or when costs were never tracked. Gather month-end statements for every foreign holding, your purchase records or adjusted cost base, any vesting or exercise statements, the year's dividend and interest slips, and a note of the exchange rates you used.

Does US-dollar (USD) cash or a US-dollar GIC at a Canadian bank count?

No, US-dollar cash or a US-dollar GIC at a Canadian bank does not count. Funds count only if they are situated, deposited or held outside Canada, and a debt counts only if a non-resident owes it (s. 233.3(1)). US dollars on deposit at a Canadian bank or a Canadian broker, including US dollars you converted at the broker, are held in Canada. A US-dollar GIC from a Canadian bank is a debt of a Canadian issuer.

The same money moved to a US bank or a US broker becomes specified foreign property and goes in category 1, "Funds held outside Canada" (T1135 instructions). A GIC, treasury bill or term deposit issued by a non-resident goes in category 3, wherever it is held.

Do Canadian-listed ETFs holding US stocks count, and what about US-listed ETFs?

A Canadian-listed ETF does not count; a US-listed ETF does. The CRA says investors do not report an investment in a Canadian mutual fund trust or Canadian mutual fund corporation, because it is not specified foreign property, whatever the fund itself holds (CRA Q&A). Most Canadian-listed ETFs are one of these; the fund's documents say which. A fund listed in Canada but resident outside Canada is a non-resident fund, reported as described next.

For a non-resident fund, you report the fund itself, not the stocks inside it, with the fund's country of residence as the country code (CRA Q&A). The CRA also confirms that shares of a non-resident corporation count even when a Canadian broker holds them. On Part B, a US fund organized as a corporation fits category 2 and one organized as a trust fits category 4; held at a Canadian dealer, category 7 lets you report it in the account total instead.

Do employer stock plan shares, RSUs and stock options count?

Vested shares of a US employer count, wherever they are held. Shares of a non-resident corporation are specified foreign property, and the CRA's country code for them is the corporation's country of residence (CRA Q&A). If the employer is Canadian but a foreign plan administrator holds the shares, they still count: the CRA puts Canadian shares held by a foreign agent in category 6, with the agent's country as the code.

The cost of plan shares is not zero. When a benefit from acquiring shares under an employee agreement is taxed under section 7, that benefit is added to the shares' adjusted cost base (s. 53(1)(j)), so the cost is often close to the shares' value when you acquired them. That rule covers benefits taxed under section 7; if an award was taxed another way, confirm its cost from your slips and plan statements.

Unvested RSUs and unexercised options are less settled. The Act's definition includes a right to acquire specified foreign property (s. 233.3(1)), and the form lists options and rights to acquire under category 6. No CRA guidance found says what cost amount an unvested award has, so whether a large grant counts toward the threshold is unsettled.

Joint account or in my spouse's name: whose T1135 is it?

Each person tests the cost of the specified foreign property they own. The Act counts the cost amount "to the entity" of specified foreign property "of the entity" (s. 233.3(1)), so the question is who owns the property, not whose name is on the statement alone. For a joint venture, the CRA says each party may have to file based on the cost of the property it owns (CRA Q&A).

The CRA's T1135 materials do not say how to split a joint account. The spousal attribution rules move only the income for tax (s. 74.1); they do not change who owns the property, which is what the form tests. Where one spouse supplied the money for a joint or spouse-named account, who owns it can change whether each of you is over the threshold. Note who contributed what and whose name is on the account.

Which Part B category does each holding go in?

Part B has seven tables. Report each property held at any time in the year in the table that fits it (T1135 instructions). That includes property sold before year-end (CRA Q&A): its year-end amount is 0 and its gain or loss goes in the gain column.

Fill in every field for a reported property, with "0" for nil amounts, in whole dollars.

When can a Canadian broker account go in category 7?

Use category 7 when the account is with a Canadian registered securities dealer or a Canadian trust company. You may total all the property held with that dealer by country, or give a total for each account by country (T1135 instructions). A registered securities dealer is one registered or licensed under provincial law to trade securities without restriction (s. 248(1)); the CRA says the firm holding your securities can confirm its status. A US broker or a US plan administrator does not qualify.

What goes in Part A?

Part A is the short version, open only when your total cost stayed below $250,000 all year. Tick each type of property you held, enter the top three countries by highest month-end cost, and give one total for gross income and one for gain or loss (T1135 instructions; CRA Q&A).

Which amount goes in each column: cost or fair market value?

Category 1 asks for the amount of funds, categories 2 to 6 for cost, and category 7 for fair market value. Cost amount is generally the adjusted cost base, not market value (s. 248(1)). Property you brought when you immigrated, or received as a gift or inheritance, starts at its fair market value at that time (T1135 instructions).

The "maximum during the year" columns may use the highest month-end figure, for cost and for category 7 fair market value. So month-end statements are the usual source. A broker's statement works for category 7 market values. For cost, check the statement's book cost against your own adjusted cost base before relying on it.

The filing tests still use your total cost at any time in the year, not only at month-end, even when you report category 7 at market value. A portfolio with a market value above $250,000 can still use Part A if its cost stayed below that all year.

Do I convert everything to Canadian dollars, and at which exchange rate?

Yes, report every amount in Canadian dollars. Work out each amount in the foreign currency first, then convert it (T1135 instructions). The functional currency election the form mentions is open only to certain corporations, not individuals (s. 261(3)). The rate depends on the column.

For your tax return, the Act converts an amount at the Bank of Canada rate for the day it arose, or another rate the CRA accepts (s. 261). Use the same source of rates throughout and keep a note of it.

What goes in the income and gain columns, and where do currency gains go?

Report gross income from each property, not net. Report the full capital gain or loss, not the taxable part, and do not offset foreign gains with losses on Canadian property (CRA Q&A).

A gain on a foreign stock already includes currency movement, because its cost converts at the rate on the purchase day and its proceeds at the rate on the sale day (s. 261(2)). Category 1 has no gain column, so the form gives no place in that table for a gain from converting foreign cash. On your return, an individual's net gain or loss from foreign currency counts only beyond $200 for the year (s. 39(1.1)).

How do I correct a T1135: wrong method, or e-filing rejected it?

To correct a T1135, file an amended form. Tick the amended-return box and include every required item, not only the changes. The CRA accepts an amended form on the same version as the one first filed (CRA Q&A). If your total cost reached $250,000 at any time in that year, the amended form must use Part B.

Individuals can e-file T1135 only for the 2017 and later tax years; earlier years must be filed on paper. If e-filing is refused, file on paper: a paper T1135 can go with a paper return or be mailed on its own to the Winnipeg Tax Centre; the street address is on the form (CRA filing page).

A form that left out property, or was never filed, is a different problem. See missed foreign property reports for US accounts and unreported income and voluntary disclosure.

Example

These examples are illustrative; figures are in Canadian dollars except the US-dollar cash in the first.

Canadian ETFs and US-dollar cash: no form

A resident holds C$150,000 of Canadian-listed ETFs, organized as Canadian mutual fund trusts, that own US stocks, plus US$40,000 of cash at a Canadian broker. On these facts none of it is specified foreign property, so this resident needs no T1135, even though most of the portfolio tracks US companies.

US stocks at a Canadian broker

A resident holds US stocks and US-listed ETFs at a Canadian registered dealer. Their cost is C$180,000 at year-end and never above C$190,000 during the year. Total cost passed the filing threshold but stayed below the Part A limit, so the resident may use Part A, or Part B category 7. On category 7: country US, the highest month-end market value (say C$230,000) at the year's average rate, the year-end market value (say C$220,000) at the year-end rate, C$4,000 of gross dividends and a C$6,000 gain.

Employer shares and a US bank account

A resident holds vested shares of a US employer with a cost of C$120,000 (assumed here to equal their value when taxed) through a US plan administrator, plus a US bank account that peaked at C$30,000. Total cost passed the filing threshold but stayed below the Part A limit, so this resident files T1135 and may use Part A. On Part B instead, the shares go in category 2 and the bank account in category 1, both with the United States as the country. The plan administrator is not a Canadian dealer, so category 7 is not available.

Different for you?

• You are not sure you have to file, or need the deadline or penalties: see foreign property and affiliate reporting.
• You never filed T1135 for a US account: see missed foreign property reports for US accounts and get individual tax help.
• Foreign income or property was left off past returns: see unreported income and voluntary disclosure.
• You moved to Canada this year: the tax year you first become resident needs no T1135, and arrival value becomes your cost; see your first year as a Canadian tax resident.
• Your US broker is restricting your account after a move: see keeping a US brokerage account after moving to Canada.
• You need to report the foreign income itself or claim foreign tax: see foreign income on a Canadian return.
• You rent out or sold property abroad: see property outside Canada.
• You own a large share of a foreign company: see owning a company abroad.
• You live in Quebec: Revenu Québec also requires its own foreign property return, form TP-1079.8.BE-V, for tax years ending after December 30, 2025; T1135 does not replace it (Quebec, 2025 c. 35, s. 128).
• You are a US citizen: the same accounts may need US reports; see foreign account reporting.
• Employer equity, a joint or spouse-funded account, or a past form to correct: these turn on facts the CRA has not addressed directly; get individual tax help.