Your First Year as a Tax Resident: Do You Need to File the T1135?

The exemption for the year you first become a resident, and filing from the second year

Scott Tang, CPAUpdated 2026-11-052026 rules4 min read

You've just immigrated, and your savings and stocks in China add up to well over $100,000. Do you need to file the T1135 with your first return? Not in the first year: an individual doesn't need to file the T1135 for the year they first become a Canadian tax resident. But from the second year, if the total cost of your foreign assets is more than $100,000 at any time in the year, you need to file it.

Exempt in year 1

Individuals don't file the T1135 for the year they first become Canadian residents

From year 2

File if you are over $100,000 at any time in the year

Value on landing

The cost of your foreign assets is their market value on the day you become a resident

Income still reported

Foreign income from after you land in the first year must still be reported

What to do in the first and second years

First year (the year you land)

No T1135

But report foreign interest, dividends and rent from after you land

Put together your asset list and the values on landing

Getting ready for the second year

From the second year

Cost is the market value on landing

File if the total is over $100,000

Under $250,000 all year: simplified method; $250,000 or more at any time: detailed method

Due with your tax return, usually April 30; the date differs if you're self-employed, but any balance owing is generally still due April 30

Who the exemption applies to

Situation	No filing in the first year The exemption applies	Doesn't apply Check under the rules
Newcomers coming to Canada for the first time	✓	—
You lived in Canada before, left and came back	—	✓Generally can't use the "first-time" exemption again
Trusts, corporations	—	✓The exemption is for individuals only
International students or work permit holders who were already tax residents before	—	◐Depends on which year you first became a Canadian resident

Newcomers coming to Canada for the first time

✅ No filing in the first year: ✓
⚠️ Doesn't apply: —

You lived in Canada before, left and came back

✅ No filing in the first year: —
⚠️ Doesn't apply: ✓Generally can't use the "first-time" exemption again

Trusts, corporations

✅ No filing in the first year: —
⚠️ Doesn't apply: ✓The exemption is for individuals only

International students or work permit holders who were already tax residents before

✅ No filing in the first year: —
⚠️ Doesn't apply: ◐Depends on which year you first became a Canadian resident

Points to watch

Put your list together in the first year
Record the name, country, market value on landing and exchange rate for each foreign asset in a table; filling in the T1135 in the second year will be much easier.
Spouses count separately
For jointly held assets, each spouse uses their own share to see whether they are over the threshold.
Personal-use homes don't count; rentals do
A home in China that your family lives in generally doesn't need to be reported; property that is rented out or held empty as an investment must be included.
Forgetting to file in the second year
The late-filing penalty is $25 a day, with a minimum of $100 and a maximum of $2,500. See "T1135 Foreign Property Reporting: What to Report and How the $100,000 Test Works" in the Cross-Border Tax series.

How Sheng Qian CPA can help

Build the list in year one
When we prepare your first return, we put together your foreign assets and their values on landing at the same time.
File on time in year two
The T1135 is completed together with your annual return, so your income and assets match.
Check whether the exemption applies
If you have lived in Canada before or your status has changed, we first confirm which year is your "first year". For fees, see "What Sheng Qian CPA Can Do for Newcomers and People Leaving Canada: Support on Arrival and on Departure" in this series.

Sources

Disclaimer

This article is general information only and is not tax advice. Everyone's situation is different; please consult a CPA about your specific arrangements. Service fees are as set out in our written quote.