New tax-free saving account

maomeimei

Any one know how this new policy works?

howardxue

How the Tax-Free Savings Account Will Work
& X3 d1 K% R4 M# i3 @Starting in 2009, Canadian residents age 18 or older will be eligible to contribute up to $5,000 annually to a TFSA, with unused room being carried forward.
8 h% \; J% p4 H8 {( n+ QContributions will not be deductible.
Capital gains and other investment income earned in a TFSA will not be taxed.
. `' V4 h: H" J( e5 O! `. hWithdrawals will be tax-free.
' o1 y0 z: h' w' Z4 u- v1 h* MNeither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
Withdrawals will create contribution room for future savings.
) U# B( d& v5 t! u9 {Contributions to a spouse’s or common-law partner’s TFSA will be allowed, and TFSA assets will be transferable to the TFSA of a spouse or common-law partner upon death.
Qualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
- W$ w! |5 A+ m2 N2 p' @& hThe $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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