Hey Everyone!
I have been looking around to see if CRA has extended the filing deadline for T1135s if the client is eligible for the June 2nd filing deadline (ie. they have capital gains or losses). Has anyone seen anything about this?
We normally file these with the T1s, but with no clear statement from CRA I think I’ll have to go through all the files we are filing after April 30th to make sure we don’t have any T1135s that need to file on the normal deadline!
Good call. Although it’s done with the tax return, I’m not sure CRA would consider it part of the return. Better safe than sorry.
Absolutely agree that they should be filed by April 30. In my experience CRA sometimes tries to have its cake and eat it too when it comes to T1135 deadlines. I did a voluntary disclosure for some late T1135s a few years ago, and they tried to deny it based on the fact that the income tax return for one of the years had been subject to a demand to file, and therefore the T1135 for that year was not voluntary. I successfully argued that they are seperate filings with seperate penalties, noting that CRA would not accept the argument that if an income tax return for a year was filed on time, then a late T1135 for that year should also be considered to have been filed on time.
So they will try to go after deliquent T1135s for sure, and I wouldn’t take the chance that a filing extension for income tax returns would be allowed for T1135s as well, unless it’s explicitly stated.
Good news!
The CRA has indicated that the relief extends to forms and elections normally included with T1 returns. Specifically, the CRA has stated:
“The CRA will grant relief in respect of late-filing penalties and arrears interest until June 2, 2025, for impacted T1 Individual filers to provide additional time for taxpayers reporting capital dispositions to meet their tax filing obligations. This relief extends to any forms and/elections that are normally included with T1 returns, including Form T1135 Foreign Income Verification Statement.”
“Impacted filers”?? I have clients who don’t even know if they’re awaiting T3’s, let alone whether they’ll show capital gains. Everyone’s potentially impacted.
A T1135 filing requirement isn’t based on having capital gains. It’s based on having foreign investments with a total cost of $100k at some point during the year.
CRA is saying that you can file the T1135 up to June 2nd, 2025 with no penalty or interest IF the client is an “impacted filer”. Impacted filers are those that have capital disposals in 2024.
Reponding to the comment about taxpayers not knowing whether they’ll have capital gains specifically.
It’s not based on capital gains but the amount of foreign capital gains do have to be reported on the T1135 by country.
The T3s are the real issue this year. I have clients who suspect they might be getting T3s but do NOT have capital gains. Are the gains listed on the slip enough for the relief or do they have to have had a disposition reported on Sch 3?