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.
) Z8 W1 n" T( F9 x2 D% C8 x. A7 `: BContributions will not be deductible.
) J0 A- G2 i' B% a8 u* Y5 E1 qCapital gains and other investment income earned in a TFSA will not be taxed.
Withdrawals will be tax-free.
% U/ q8 i0 N' a) rNeither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
Withdrawals will create contribution room for future savings.
6 Y0 `2 w# s3 x' B/ `/ O* WContributions 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.
Qualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
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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