The Department of Finance Canada’s Budget 2015 proposes to put into operation a new streamline reporting system for foreign assets.
Presently, Canadian resident individuals, partnerships, corporations, and trusts that own a total value of more than $100,000 of specified foreign property must disclose detailed information regarding each property by filing Form T1135, Foreign Income Verification Statement, with the Canada Revenue Agency (“CRA”). This detailed reporting requirement that was introduced in 2013 has proven cumbersome for some taxpayers.
With the proposed reporting procedure, the detailed information reporting will continue to be used for specified foreign property only if it has a total cost of $250,000 or more during a year. Specified foreign property with a total cost below $250,000 and greater than $100,000 must still be reported, but will be done under the new streamlined reporting procedure.
This method will maintain the CRA’s ability to fight international tax evasion and tax avoidance, but will help relieve the compliance burden on taxpayers when the amount of their specified foreign property is below the $250,000 threshold.
The CRA anticipates releasing the details for the simplified reporting procedure prior to November 2015. The streamlined method will apply to taxation years that begin after December 31, 2014, commencing with the 2015 tax year for individuals.
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