17 July 2025 External T.I. 2025-1061051E5 - Specified foreign property

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Is the XXXXXXXXXX a "specified foreign property" such that a T1135 reporting obligation may exist?

Position: None taken.

Reasons: We do not have sufficient information about the XXXXXXXXXX to definitively determine whether it meets the definition of "specified foreign property" in subsection 233.3(1) however, general information provided.

XXXXXXXXXX									2025-106105
K. Graham

July 17, 2025

Dear XXXXXXXXXX:

Re: Specified foreign property

This is in reply to your enquiry dated April 11, 2025 and received by the CRA on April 14, 2025, regarding whether certain foreign pension plans are considered “specified foreign property,” a term defined in subsection 233.3(1) of the Income Tax Act, R.S.C. 1985, c. 1, 5th Supp., as amended (the “Act”).

You informed us that your client, a citizen of XXXXXXXXXX and resident in Canada, contributed to the XXXXXXXXXX during the period in which she was resident in, and employed in, XXXXXXXXXX. You described the XXXXXXXXXX as a compulsory savings and pension scheme for citizens and permanent residents of XXXXXXXXXX, which serves to fund their housing, retirement and medical needs in XXXXXXXXXX. The XXXXXXXXXX consists of an XXXXXXXXXX Account (for retirement and housing), a XXXXXXXXXX Account (for medical needs), and a XXXXXXXXXX Account or XXXXXXXXXX Account, depending on the age of the contributor. You also noted that money held in the XXXXXXXXXX is generally restricted and cannot be withdrawn, save by renunciation of citizenship or permanent residency in XXXXXXXXXX. Your client does not intend to renounce her XXXXXXXXXX citizenship and is not yet at the age when she can begin making withdrawals from the XXXXXXXXXX.

You have asked whether the XXXXXXXXXX meets the definition of “specified foreign property” such that your client may be obligated to file Form T1135, Foreign Income Verification Statement (“T1135”).

Our Comments

This technical interpretation provides general comments about the provisions of the Act, and does not comment on the application of any provision of a foreign law. It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC70-6R12, Advance Income Tax Rulings and Technical Interpretations.

Please note that all legislative references in this document are to the Act, unless otherwise stated.

In your request to us, you described the XXXXXXXXXX as a “foreign pension plan” as well as a “compulsory savings and pension scheme.” Whether the XXXXXXXXXX is a pension plan is a question of fact. As we discussed with you, we do not have sufficient information to determine whether the XXXXXXXXXX is a pension plan, an employee benefit plan, a non-resident trust, or some other type of plan or arrangement. However, you indicated that general information regarding the meaning of the term “specified foreign property” and the obligation to file a T1135 would be helpful.

Section 233.3 imposes the requirement for a “specified Canadian entity” to disclose its ownership of any specified foreign property on a T1135. This obligation generally arises in respect of a taxation year if the total cost amount of such properties, combined, exceeds $100,000 (in Canadian currency) at any time during that taxation year. The term “specified Canadian entity” is defined in subsection 233.3(1) and includes an individual who is a taxpayer resident in Canada as long as all of the individual’s taxable income is not exempt under Part I of the Act.

The term “specified foreign property” is defined in subsection 233.3(1) and includes funds situated, deposited or held outside Canada, as well as an interest in a non-resident trust. However, an interest in a trust that is described in paragraph (a) or (b) of the definition of “exempt trust” in subsection 233.2(1) is specifically excluded from the definition of specified foreign property.

Pursuant to paragraph (b) of the definition of exempt trust in subsection 233.2(1), a trust may be an exempt trust if it meets all of the following conditions:

• the trust must be resident in a country which imposes an income tax;
• the trust must be exempt from income tax in that country;
• the trust must be established principally in connection with, or its principal purpose must be to administer or provide benefits under, one or more superannuation, pension or retirement funds or plans or plans established to provide employee benefits; and
• the trust must be maintained primarily for the benefit of non-resident individuals (that is, individuals not resident in Canada) or be governed by an employees profit sharing plan.

Where it is determined that an obligation to file a T1135 for a taxation year exists, the T1135 is due to be filed by the filing due date of the specified Canadian entity (for an individual, the filing due date is April 30 of the year following the taxation year). A failure to file the T1135 by the reporting deadline is subject to penalties.

For additional questions regarding the T1135, you may wish to refer to the CRA’s web page “Questions and answers about Form T1135” (https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/questions-answers-about-form-t1135.html#h1) or “Foreign Income Verification Statement” (https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/foreign-income-verification-statement.html).

We trust our comments are of assistance.

Yours truly,

Angelina Argento
Section Manager
for Division Director
International Division
Income Tax Rulings Directorate
Legislation Policy and Regulatory Affairs Branch