New tax-free saving account

maomeimei

Any one know how this new policy works?

howardxue

How the Tax-Free Savings Account Will Work
3 G. C5 b' W" J' zStarting 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.
1 n0 f7 {' k) ]0 X7 q# f. w3 f& h# {Contributions will not be deductible.
  z& r* s! N2 v- Y* HCapital gains and other investment income earned in a TFSA will not be taxed.
3 a8 e" i8 x5 q) R" Q- 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.
Withdrawals will create contribution room for future savings.
1 ?% L7 i( q4 `# ^8 a' RContributions 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.
& B5 H! ~6 @. e" E: x4 [Qualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
( I/ ]' m/ q; J( A/ I* 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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