TP-1079.8.BE, Foreign Property Return

The answer to the question If the taxation year ends after December 30, 2025, did the corporation hold designated foreign property with a total cost of more than CAN$100,000 at any time during that year (form TP-1079.8.BE)? will be Yes if:

The total of the amounts indicated in columns Maximum cost indicated during the year and Maximum fair market value during the year of Part 3.2, Detailed return, exceeds $100,000; or
One of the following boxes has been selected:

If the total cost of all designated foreign property held at any time during the year or period was over $100,000, but less than $250,000, you can complete either section 3.1 or 3.2.;

However, if the total was $250,000 or more, you must complete section 3.2.

Form TP-1079.8.BE will be applicable if:

The corporation has a permanent establishment in Québec;
The answer to the question If the taxation year ends after December 30, 2025, did the corporation hold designated foreign property with a total cost of more than CAN$100,000 at any time during that year (form TP-1079.8.BE)? is Yes; and
The fiscal period covered in Part 2, Period covered, ends after December 30, 2025.

Transfer of Form ACB into Form TP-1079.8.BE

All data transferred from Form Tracking the Adjusted Cost Base (Jump Code: ACB) into Form T1135 (Jump Code: 1135) will be automatically transferred into Form TP-1079.8.BE. The amounts indicated on line Québec will be taken into consideration for asset categories Shares and Bonds. The information completed in Form T1135 will also be transferred into Form TP-1079.8.BE.

If the data relating to property is also transferred into Schedule 6 (Jump Code: 6), the program will transfer the gain (or loss) resulting from the disposition and will take into consideration the amounts indicated on line Québec.

* Please note that no transfer will take place if Part A, Simplified reporting method, has been completed in Form T1135.

Transfer of Schedule 6 into Form TP-1079.8.BE

All data transferred from Schedule 6 into Form T1135 will be automatically transferred into Form TP-1079.8.BE. The amounts indicated on line Québec of column Gain (or loss) will be taken into consideration. The information completed in Form T1135 will also be transferred into Form TP-1079.8.BE.

* Please note that no transfer will take place if Part A, Simplified reporting method, has been completed in Form T1135.

Transfer of Form RENTAL into Form TP-1079.8.BE

All data transferred from Form Statement of Real Estate Rental Properties (Regulation 1100(11)) (Jump Code: RENTAL) into Form T1135 will also be transferred into Form TP-1079.8.BE. The information completed in Form T1135 will also be transferred into Form TP-1079.8.BE.

* Please note that no transfer will take place if Part A, Simplified reporting method, has been completed in Form T1135.

Information

Who has to file this form?

This form must be filed by all taxpayers who reside in Québec (including non-resident trusts deemed resident in Canada and subject to Québec income tax under sections 593 to 597 of the Taxation Act [TA]) and hold designated foreign property for which the total cost is over CAD 100,000 at any time in a given taxation year or fiscal period.

It must also be filed by all partnerships who reside in Québec and hold such property whose total cost is over that amount at any time during a given fiscal period.

However, this form does not have to be filed by:

an individual (other than a trust) for the year in which they first become a resident of Canada;
a mutual fund corporation or mutual fund trust;
an investment corporation owned by persons not resident in Canada;
a person (including a trust) all of whose taxable income is exempt from tax under Part I of the TA;
a trust or corporation that is a registered investment under section 204.4 of the Income Tax Act (ITA);
a trust described in any of subparagraphs (a) to (d) of the third paragraph of section 647 of the TA;
a trust in which all the beneficial interests are held by one or more persons described above;
a partnership where the share of the partnership's income or loss attributable to a designated member (a person not resident in Canada or any of the persons described above) is 90% or more of the partnership's income or loss.

What property must be reported?

You are required to report all property that is designated foreign property as defined in section 1079.8.15.8 of the TA.

Designated foreign property includes, among others:

funds or incorporeal property (for example, patents and copyrights) situated, deposited or held outside Canada;
corporeal property situated outside Canada;
a share of the capital stock of a corporation not resident in Canada that is held by the filer or their legal or authorized representative;
an interest in a trust not resident in Canada that was acquired for consideration (other than an interest in a non-resident trust that is a foreign affiliate for the purposes of section 233.4 of the ITA);
a share of a corporation resident in Canada held by an individual or for them outside Canada;
an interest in a partnership that holds designated foreign property but is not required to file this form;
an interest in, or rights with respect to, an entity not resident in Canada;
property that is convertible into, is exchangeable for, or confers a right to acquire designated foreign property;
indebtedness owed by a non resident in Canada, including government and corporate bonds, debentures, mortgages and notes receivable;
an interest in a foreign insurance policy;
precious metals, gold certificates and futures contracts held outside Canada.

The following property does not have to be reported:

property used or held exclusively in the course of carrying on an active business;
shares of the capital stock or indebtedness of a foreign affiliate, if the filer is one of the persons referred to in section 233.4 of the ITA;
an interest in an exempt foreign trust within the meaning of section 1079.8.15.8 of the TA;
personal-use property as defined in section 287 of the TA;
an interest in or a right to acquire any of the above excluded foreign property.

Filing deadline

This form must be filed on or before the due date of the filer's income tax or information return for the taxation year or fiscal period in question, even if the return is not required to be filed for that year or period.

Note that, if the filer fails to file this form as and when required or fails to report income from designated foreign property, three years will be added to the usual period during which we can make a reassessment.

Filing this form

If the filer is an individual or corporation, you can:

file this form online using authorized software (see the list of authorized software on our website at revenuquebec.ca), when you file their income tax return; or
mail us this form.

You can also have an accredited person (tax preparer) file this form online, along with the income tax return.

If the filer is a partnership or trust, you cannot file this form online. You must mail it to us.

Mailing this form

If you are mailing us this form, you can enclose it with the filer's income tax or information return (unless the filer is a corporation) or mail it separately to one of the following addresses:

Revenu Québec
3800, rue de Marly
Québec (Québec) G1X 4A5

Revenu Québec
C. P. 3000, succursale Place-Desjardins
Montréal (Québec) H5B 1A4

Penalties

Penalties may apply regarding the filing of this form.

Penalties for failing to file this form

A filer who fails to file this form as and when required is liable to a penalty of $25 per day, up to $2,500.

If they fail to file it knowingly or under circumstances amounting to gross negligence, the applicable penalty will be $500 for each month or part of a month (for a maximum of 24 months), up to $12,000 (minus the above penalty).

If it still has not been filed after 24 months, an additional penalty of 5% of the cost amount of the designated foreign property will be levied, after subtracting both above penalties.

Penalties for failing to comply with a formal demand

If, knowingly or under circumstances amounting to gross negligence, a filer fails to comply with a formal demand to file this form, they are liable to a penalty of $1,000 per month or part of a month (for a maximum of 24 months), minus the above penalty of $25 per day.

If this form still has not been filed after 24 months, an additional penalty of 5% of the cost amount of the designated foreign property will be levied, after subtracting the penalties mentioned in the previous paragraph.

Penalty for a false statement or omission

If the filer makes a false statement or omits to provide information about designated foreign property, they are liable to a penalty equal to $24,000 or 5% of the cost amount of the designated foreign property, whichever is greater.

How to complete this form

Enter all the required information for each designated foreign property being reported. If there is no amount to enter for a given property, enter 0 on the corresponding line rather than leaving it blank. Amounts should be rounded to the nearest dollar.

Functional currency (line 01)

If the filer has elected to file their income tax or information return in a given functional currency, enter the applicable currency code on line 01. You should enter all amounts in that functional currency. The codes for functional currencies are as follows:

Australian dollar (AUD);
U.S. dollar (USD);
U.K. pound (GBP);
Euro (EUR);
Yen (JPY).

If they have not made a currency election, enter all amounts in Canadian dollars.

Amending a return (box 02)

If, after having sent us this form, the filer realizes that they failed to report designated foreign property for the year or period, they must complete a new copy of this form and check box 02 to indicate an amended return.

Type of filer (boxes 03 to 06.3)

Check the appropriate box.

If the filer is an individual (box 03), check box 03.1 or 03.2 to indicate whether the individual or their spouse is an individual in business.

If the filer is a partnership (box 06), check box 06.1, 06.2 or 06.3 to specify the partnership's end partners.

An end partner is a taxpayer (individual, corporation or trust) that receives an allocation from the partnership after it has flowed through interposed partnerships.

Country codes (lines 37 to 39)

See the International Organization for Standardization's website for the list of 3-letter (alpha-3) country codes defined in ISO standard 3166.

Foreign property is held in:

the country where the funds are located, for funds held outside Canada;
the country of residence of the non-resident corporation, for shares of non-resident corporations (other than shares of foreign affiliates);
the country of residence of the non-resident issuer, for indebtedness owed by a non-resident;
the country of residence of the trust, for interests in non-resident trusts;
the country where property is located, for real property held outside Canada;
the country where the property is located, for other property held outside Canada;
one of the above countries (depending on the type of property), for property held through a Canadian registered securities dealer or a Canadian trust company.

If you are uncertain of the appropriate country code for a particular property, enter "OTH" (for "Other").

Foreign income (lines 40 and 41)

The gross income from all designated foreign property and the capital gain (or loss) from the disposition of all designated foreign property must be entered in Canadian dollars (unless the filer has elected to file their income tax or information return in a functional currency). Note that the gross income or capital gain (or loss) must be reported in the filer’s income tax or information return, as applicable.

Detailed reporting (lines 46 to 59)

For each type of designated foreign property held at any time during the year or period, enter the required information in the appropriate table.

Note that all amounts must be entered in Canadian dollars (unless the filer has elected to file their income tax or information return in a functional currency). In general, to convert amounts from a foreign currency into Canadian dollars, you must use the exchange rate in effect at the time of each transaction (i.e. when the income was received or the property was purchased). If the filer received property income throughout the year, you can use an average exchange rate for the year.

Reported cost and maximum reported cost

For certain types of designated foreign property, you must enter the property's cost amount at the end of the year and its maximum cost amount during the year.

Cost amount is defined in section 1 of the TA. It is generally the acquisition cost of the property. If the filer is an individual who has immigrated to Canada, the cost amount is the fair market value of the property at the time of immigration. Similarly, if such a filer received designated foreign property as a gift, or inheritance, the cost amount is its fair market value at the time of the gift or inheritance.

The maximum cost amount during the year can be based on the maximum month-end cost amount during the year.

Funds held outside Canada (lines 46 and 47)

Funds held outside Canada include money on deposit in foreign bank accounts, money held with a foreign depository for safekeeping and money held by any other foreign institution at any time during the year. Prepaid debit or credit cards and negotiable instruments, such as cheques and drafts, are also considered funds held outside Canada. However, marketable securities should be reported as indebtedness owed by non-residents (lines 50 and 51).

When calculating the maximum funds held during the year (column C), use the average exchange rate for the year to convert foreign currency into Canadian dollars. For the funds held at year-end (column D), use the exchange rate at the end of the year.

Shares of non-resident corporations (other than shares of foreign affiliates) [lines 48 and 49]

Report all shares of non-resident corporations whether or not they are held in Canada.

Do not report shares of a foreign affiliate for the purposes of section 233.4 of the ITA. Generally, a foreign affiliate is a non-resident corporation (or a non-resident trust, subject to certain conditions) in which the filer holds at least 1% of the shares individually and, either alone or with related persons, holds 10% or more of the shares.

Debts owed by a non-resident (other than a foreign affiliate for the purposes of section 233.4 of the ITA) [lines 50 and 51]

Report all amounts owed to the filer by a non-resident (other than a foreign affiliate for the purposes of section 233.4 of the ITA) whether the indebtedness is held inside or outside Canada. Include all promissory notes, bonds, debentures, commercial paper, loans, mortgages, and other indebtedness owed to the filer by a non-resident. Marketable securities, such as guaranteed investment certificates, government treasury bills and term deposits issued by a non-resident, should be considered indebtedness owed by a non-resident.

Interests in a non-resident trust (lines 52 and 53)

Report all interests in non-resident trusts acquired for consideration, other than a non-resident trust that is a foreign affiliate for the purposes of section 233.4 of the ITA, or an exempt foreign trust.

Real property held outside Canada (other than personal use property and real property used in an actively carried on business) [lines 54 and 55]

Report all the filer's real property located outside Canada other than real property used in an active business or used primarily for personal use (such as a vacation property used primarily as a personal residence). Note that rental property outside Canada is considered real property held outside Canada.

Other property held outside Canada (lines 56 and 57)

Report any property that does not correspond to any of the other types of property, including:

shares of corporations resident in Canada held by or for the filer outside Canada;
an interest in a partnership that holds designated foreign property but is not required to file this form;
foreign insurance policies;
precious metals (for example, gold and silver) or bullion situated outside Canada;
commodity or future contracts, options or derivatives that constitute a right to, a right to acquire or an interest in designated foreign property; and
any other rights to, rights to acquire or interests in designated foreign property.

Property held through a registered Canadian securities dealer or a Canadian trust company (lines 58 and 59)

A filer who holds designated foreign property through a Canadian registered securities dealer (as defined in section 1 of the TA) or a Canadian trust company (as determined under paragraph (b) of the definition of "restricted financial institution" in section 1 of the TA) is permitted to report the aggregate amount of all such property on lines 58 and 59.

In columns C to F, enter the aggregate amount of all the property held through a particular registered securities dealer or trust company in a given country. If the filer has several accounts with such a dealer or trust company, you can enter the aggregate for each account on a country-by-country basis.

When calculating the maximum fair market value during the year (column C), use the average exchange rate for the year to convert foreign currency into Canadian dollars. For the fair market value at year-end (column D), use the exchange rate at the end of the year.

The maximum fair market value during the year may be based on the maximum month-end fair market value.

Signature

This part must be signed by:

the filer, in the case of an individual;
an authorized officer, in the case of a corporation;
the trustee, succession liquidator or administrator, in the case of a trust; or
an authorized partner, in the case of a partnership