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.
( f" a  `9 q7 b3 n4 f5 b! MContributions will not be deductible.
: _1 _: m# ~5 H, s% FCapital gains and other investment income earned in a TFSA will not be taxed.
$ I/ F, v4 b; L' b8 L! ]: DWithdrawals will be tax-free.
Neither 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.
- J: }1 v: F" R& O$ d" e/ q, XContributions 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.
, m1 k$ {. ]8 Z/ oQualified 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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