Foreign Income

As a deemed resident of Canada, you have to report your income from all sources, both inside and outside Canada.

How do you report foreign income and other amounts?

If you were a deemed resident of Canada in 1999, report foreign income and other amounts (such as expenses and taxes paid) in Canadian dollars. Use the exchange rate that was in effect on the day you received the income or paid the expense. If the amount was paid at various times throughout the year, you can contact us to get an average annual rate.

Tax Tip
If you were a deemed resident of Canada in 1999 and you paid foreign taxes on foreign income you received, do not deduct the amount of tax the foreign country withheld. However, you may be able to claim a foreign tax credit. See "Lines 431 and 433 - Federal foreign tax credit" on page 50 for details.

Foreign property

If you were a deemed resident of Canada in 1999, there is a question for you to answer on page 1 of your return, about owning or holding foreign property at any time in 1999. This refers to:

• foreign property you owned; and
• your share of foreign property in which you had an interest.

Answer "yes" if the total cost of all these properties was more than CAN$100,000. Get Form T1135, Foreign Income Verification Statement, and attach a completed copy to your return.

Note
Foreign property does not include:

• property in your registered retirement savings plan (RRSP), registered retirement income fund (RRIF), or registered pension plan (RPP);
• mutual funds registered in Canada that contain foreign investments;
• property you used or held exclusively in the course of carrying on your active business; or
• your personal-use property.

Form T1135 contains more information about filing, and a complete list of the different kinds of foreign property.

Loans and transfers to non-resident trusts

As a deemed resident of Canada, you may have loaned or transferred funds or property to a non-resident trust in 1999 or a previous year. If so, you may have to complete and file Form T1141, Information Return in Respect of Transfers or Loans to a Non-resident Trust. For more information, get Form T1141.

Beneficiaries of non-resident trusts

As a deemed resident of Canada, you may have, in 1999, received funds or property from, or been indebted to, a non-resident trust under which you were a beneficiary. If so, you may have to complete and file Form T1142, Information Return in Respect of Distributions From and Indebtedness to a Non-resident Trust. For more information, get Form T1142.

Due dates for forms

The deadline for filing these forms is the same as for your 1999 return (see "What date is your 1999 return due?" on page 10). File Form T1135 with your return. File Forms T1141 and T1142 separately from your return.

Penalties

There are substantial penalties for failing to complete and file these forms by the due date.