New tax-free saving account

maomeimei

Any one know how this new policy works?

howardxue

How the Tax-Free Savings Account Will Work
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.
Contributions will not be deductible.
' @# N5 A( ?! U# }( U6 y2 KCapital gains and other investment income earned in a TFSA will not be taxed.
- d) ?9 ?0 B6 t5 G5 a' r/ PWithdrawals will be tax-free.
' ^+ Y, X* J) D: Y+ _8 x9 ?& ~! @Neither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
/ t  i3 s4 I5 [Withdrawals will create contribution room for future savings.
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.
5 S. U) N8 v" Z9 L, }9 J+ {Qualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
" a, l' K/ W9 D- l3 a5 t( @) |- J  G! kThe $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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