The Investment Industry Association of Canada (IIAC) has sent CRA a comment letter on the new T1135 form, identifying issues of “immediate urgency” and suggesting some of the new requirements will be “impossible” to satisfy.
The new form “requires reporting of the amount of the highest cost for each foreign property held at any time in the year,” while the old one asked only for “a range of costs (e.g., more than $1 million, more than $700,000, etc.),” the letter notes.
IIAC says “the biggest issue will be where clients hold sometimes identical assets at different brokers and will effectively have to obtain the value at each/all dealers for 250 days a year, compare values for each security per day held in more than one location and report the resulting highest amount.”
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Another concern is the new form’s requirement to give a security-by-security report of net income from foreign property. For taxpayers, this will be “[l]ikely impossible due to current reporting practices and would require considerable work as the majority of dealer T5 slip and XML reporting is in aggregate form by client and not on a security-by-security basis.”
For dealers the new requirement is “[a]lmost impossible to be done accurately as income adjustments are being made by issuers as late as March 7, 2014; even assuming accurate timely filing, 25% of limited partnership units alone are refiled.”