If a partnership holds specified foreign property, does the partnership or the Canadian partner(s) need to file Form T1135?

A partnership must file Form T1135 if it is a specified Canadian entity and held specified foreign property with a total cost of more than $100,000 at any time during the reporting period. A partnership is considered a specified Canadian entity if less than 90% of its total income (or loss) comes from non-resident partners.

If a Canadian resident taxpayer has an interest in a partnership that is a specified Canadian entity, they do not need to report this interest on Form T1135.

However, if a Canadian resident taxpayer has an interest in a partnership that is not a specified Canadian entity, they must report their interest on Form T1135 if the partnership holds specified foreign property. The taxpayer should provide details of their partnership interest in category 6, "Other property outside Canada."