New tax-free saving account

maomeimei

Any one know how this new policy works?

howardxue

How the Tax-Free Savings Account Will Work
% c% I  L8 b& z4 R1 F) i; PStarting in 2009, Canadian residents age 18 or older will be eligible to contribute up to $5,000 annually to a TFSA, with unused room being carried forward.
) \8 F4 A/ U1 B; C# ~7 h3 {6 LContributions will not be deductible.
Capital gains and other investment income earned in a TFSA will not be taxed.
/ O* k1 S" S! H: f) O1 rWithdrawals will be tax-free.
5 E5 _( v$ t! ?7 F& v0 e8 }: ONeither 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.
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.
4 E" ~5 V( @, R3 Q5 E. ^0 [% FQualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
6 E, u; X! r+ @: K+ q+ h$ ^# PThe $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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