New tax-free saving account

maomeimei

Any one know how this new policy works?

howardxue

How the Tax-Free Savings Account Will Work
+ t" A9 W6 \1 O9 m/ IStarting in 2009, Canadian residents age 18 or older will be eligible to contribute up to $5,000 annually to a TFSA, with unused room being carried forward.
Contributions will not be deductible.
3 r* U4 a" p0 L* {/ XCapital gains and other investment income earned in a TFSA will not be taxed.
Withdrawals will be tax-free.
9 D2 t5 k$ D3 M/ a, a* gNeither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
  X! J2 }' r& p1 Y1 lWithdrawals will create contribution room for future savings.
1 g  u  \% I; G+ Q% dContributions 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.
# ?/ Y; R" ~+ Q! `- d/ L. P0 lQualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
& h6 {2 q5 H8 l) GThe $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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