CRA confirms that a penalty for failure to file a T1135 becomes statute barred when the Part I return for the year has become statute-barred

CRA has confirmed its position that, as a s. 216 return is a distinct return from a normal Part I return, it has its own normal reassessment period. However, the same does not apply to the imposition of penalties under s. 162(7) for failure to file T1135 returns, as the income from foreign properties in question is required to be reported on a normal Part I return rather than on a distinct return – so that such a penalty must be reassessed within the normal reassessment period for that return.

Neal Armstrong. Summary of 15 September 2015 Memo 2015-0572771I7 under s. 152(4).