New tax-free saving account

maomeimei

Any one know how this new policy works?

howardxue

How the Tax-Free Savings Account Will Work
8 ^' x* `9 B; i9 M  B4 ~3 R! JStarting 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.
- I' I6 q0 e# ~0 s: c* ?Capital gains and other investment income earned in a TFSA will not be taxed.
Withdrawals will be tax-free.
" H5 i" M3 {( E2 b3 H2 k3 sNeither 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.
0 y' c& }7 C* F8 t" D; Q' N2 uContributions 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.
/ b% s: |1 i0 i8 f+ ^7 D. sQualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
# o! v6 H; v+ N  X- a' e' ]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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