New tax-free saving account

maomeimei

Any one know how this new policy works?

howardxue

How the Tax-Free Savings Account Will Work
Starting in 2009, Canadian residents age 18 or older will be eligible to contribute up to $5,000 annually to a TFSA, with unused room being carried forward.
Contributions will not be deductible.
( V$ y/ ?( L  Q$ hCapital gains and other investment income earned in a TFSA will not be taxed.
: H' G" _' b2 e# N. C8 }1 ]Withdrawals will be tax-free.
) p  e' }6 |2 G* |! hNeither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
* l, \. e# X6 FWithdrawals will create contribution room for future savings.
# t: L) E" ]. PContributions to a spouse’s or common-law partner’s TFSA will be allowed, and TFSA assets will be transferable to the TFSA of a spouse or common-law partner upon death.
6 {3 ?" q, {8 dQualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
. P0 G4 _/ z1 D  H; U7 @+ m" ^The $5,000 annual contribution limit will be indexed to inflation in $500 increments.

howardxue

http://www.budget.gc.ca/2008/plan/chap3b-eng.asp

maomeimei

It is the interest on the saving account that will be saved, right? Only helps with people who has lots of savings.

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