Foreign property

Foreign property

The term specified foreign property is used to determine when you have to complete Form T1135, Foreign Income Verification Statement.

Specified foreign property includes:

• funds or intangible property (patents, copyrights, etc.) situated, deposited, or held outside Canada

• tangible property situated outside Canada

• a share of the capital stock of a non-resident corporation held by you or an agent on your behalf

• an interest in a non-resident trust that was acquired for consideration

• shares of corporations resident in Canada held by you or for you outside Canada

• an interest in a partnership that holds a specified foreign property unless the partnership is required to file Form T1135, Foreign Income Verification Statement

• an interest in, or right with respect to, an entity that is non-resident

• a property that is convertible into, exchangeable for, or confers a right to acquire, a property that is specified foreign property

• a debt owed by a non-resident, including government and corporate bonds, debentures, mortgages, and notes receivable

• precious metals, gold certificates, and future contracts held outside Canada

• an interest in, or right to acquire, any property that is a specified foreign property

Specified foreign property does not include:

• a property used or held exclusively in carrying on an active business

• a share of the capital stock or indebtedness of a foreign affiliate

• a personal-use property

• an interest in a trust that is one of the following:

  1. a trust that is governed by a foreign retirement arrangement

  2. a trust that is all of the following:

     • resident in a country where income tax is imposed under the laws and exempt from paying income tax under the same laws

     • principally established to administer or provide benefits under superannuation, pension or retirement funds or plans, or any funds or plans established to provide employee benefits, and is either:

       • maintained primarily for the benefit of non-resident individuals
       • governed by an employees profit sharing plan

  Note
  

  An interest in a trust that is resident in Australia or New Zealand may not be considered specified foreign property if the trust qualifies for a reduced rate of income tax under the laws of that country, is principally established to administer or provide benefits under a superannuation, pension, or retirement fund or plan, and is maintained primarily for the benefit of individuals who are residents of Australia or New Zealand.

• an interest in, or right to acquire, any property that is not a specified foreign property

For more information about foreign reporting, go to canada.ca/cra-foreign-income-verification.

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