T1135 fling no required

Tax Topics
1

Taxpayer has investments listed in his TD WEALTH Non-Registered Account(s) Year-end Resource Package

Investment Descriptions:

  • ISA-TDB@4.30% PA /NL’FRAC
  • ISA-TDB@2.80% PA /NL
  • ISA-TDB@4.30% PA /NL’FRAC
  • ISA-US$@3.90%PA /NL
  • ISA-US$@4.90%PA /NL’FRAC

(all above $100,000 each)

Are these TD ISAs Specified Foreign Property?

My thoughts:

  • The TD Investment Savings Accounts (ISAs) are deposit products issued by a Canadian bank (TD) and held in Canada, even when denominated in U.S. dollars. Therefore, they do not count as “specified foreign property.”

Why These ISAs are Not Specified Foreign Property?

My thoughts:

  • They’re deposits with a Canadian bank.
  • The underlying issuer is TD Bank Group (a Canadian bank), not a non-resident entity.
  • Deposits, even in foreign currency, held at a Canadian bank are Canadian property, not “foreign property.”

I read the following article from a Canadian Financial Institution:

Article states “A foreign currency bank account held with a bank in Canada is not specified foreign property, such as a USD chequing or deposit account, nor would foreign cash held in a Canadian investment account. Only cash in offshore accounts is included in specified foreign property that needs to be reported.”

As a final measure I can request the broker summary for support.

Conclusion:

  • None of the investments are “specified foreign property” for T1135 purposes because they’re deposit accounts with a Canadian bank, no T1135 filing is required.

Does anyone see it differently?

2

I think they are not specified foreign property, if it is, the bank would probably prepare a T1135 statement for client for filing. One thing though, can be very tricky, is how the US dollars came from. I ran into couple very strange situations where client received money abroad from so call debt, which should be specified foreign property already on itself. And other got the US from currency exchange company through hedging,

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3

@jeffliu thank you for your reply. You make some great points.