New tax-free saving account

maomeimei

Any one know how this new policy works?

howardxue

How the Tax-Free Savings Account Will Work
; {6 K4 g0 W! D, R; O% K0 EStarting in 2009, Canadian residents age 18 or older will be eligible to contribute up to $5,000 annually to a TFSA, with unused room being carried forward.
" o/ T! X$ y# K0 {) mContributions will not be deductible.
% v6 \9 n+ c; ?+ s0 `( eCapital gains and other investment income earned in a TFSA will not be taxed.
1 i4 ^0 x! A) C  N' u  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.
9 E0 y& n+ B, A: g( l0 H8 |Withdrawals will create contribution room for future savings.
* d- s! G! Z. o! ^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.
, p/ ]+ Q" O2 w, x# PQualified 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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