The legislation and information returns to implement this proposal became law on April 25, 1997. On October 2, 1997, the Ministers of Finance and National Revenue announced that the government was delaying the requirement to report, such that the first reporting date would be April 1999. On June 5, 1998, the Auditor General concluded that the requirement is justified and appropriate because there is a potentially serious erosion of the tax base.

These new foreign reporting requirements are applicable to individuals, corporations, trusts and partnerships and are applicable for taxation years and fiscal periods that begin after 1995. Form T1135 must be filed by the taxpayer's filing deadline for his or her income tax return. For a taxation year or fiscal period that ends in 1996, 1997 or 1998, the filing deadline is the later of April 30, 1998, and the day on or before which the return is otherwise required to be filed.

A Canadian resident with ownership of "specified foreign property" (the total cost of which exceeds $100,000 at any time during the year) must file Form T1135 for that year.

"Specified foreign property" includes:

• foreign bank accounts
• other indebtedness
• shares of foreign corporations
• real and other tangible property and intangible property situated outside Canada

"Specified foreign property" excludes:

• property held exclusively in the course of carrying on an active business
• funds invested in registered pension plans
• personal-use property
• shares in foreign affiliates

Should you meet these foreign reporting requirements, you must file Form T1135 for 1996, 1997 and 1998 by April 30, 1998. Please note that, regardless of whether or not the cost of your "specified foreign property" exceeds $100,000, any income therefrom must be included in determining your taxable income.