Did you know?
You do not need a tax lawyer to file voluntary disclosure with the CRA.
Voluntary Disclosure / Tax Amnesty
Voluntary Disclosure (Tax Amnesty)
The T1135 Foreign Income Verification Statement has been a hot topic in the last few years. This is a form that CRA has for taxpayers to submit when they have specific foreign property exceeding a cost base of $100,000. For example, a taxpayer moved to Canada and maintains a bank account in their home country of more than $100,000. Or, a taxpayer has a rental property abroad worth more than $100,000. Another common scenario is that a taxpayer has US investments with a cost base exceeding $100,000. Many taxpayers have assumed that because their US investments are held through a Canadian bank that this form does not apply. As well, many taxpayers who only have investment income on T3 and T5 slips also did not realize that this form applies to them as well.
For the 2015 tax year the CRA has create a simplified method and a detailed method for completing this form. If the foreign property exceeds $100,000 but is less than $250,000 then a simplified method is available which provides minimal information to CRA. If the property exceeds $250,000 then more details are required to be provided to CRA.
The penalty for not filing this form can be up to $2,500. Since there are many taxpayers only now discovering that they should have been filing this form for years, many people are contacting us to file a VDP and submit these forms so that they do not continue to have the fear of this large penalty as a daily burden.
For more information on voluntary disclosure, contact us.