New tax-free saving account

maomeimei

Any one know how this new policy works?

howardxue

How the Tax-Free Savings Account Will Work
  L( Y: ~4 Q: V6 P" S% 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.
9 r3 a3 O# Q* G: UContributions will not be deductible.
Capital gains and other investment income earned in a TFSA will not be taxed.
$ B  Z8 _" f* H1 I$ n) B4 O$ tWithdrawals will be tax-free.
Neither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
# D  t/ V+ A8 d- L' D$ f  oWithdrawals will create contribution room for future savings.
: K+ s8 A+ |% M' I: Y+ o* G# c4 QContributions 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.
$ m- j- x. M' ^9 ?) TQualified 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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