New tax-free saving account

maomeimei

Any one know how this new policy works?

howardxue

How the Tax-Free Savings Account Will Work
) _6 B# S5 g8 J2 iStarting in 2009, Canadian residents age 18 or older will be eligible to contribute up to $5,000 annually to a TFSA, with unused room being carried forward.
0 I4 r8 T/ T  _; g7 p( o% rContributions will not be deductible.
3 I' W9 M9 _0 U& OCapital gains and other investment income earned in a TFSA will not be taxed.
) H) O# P0 z7 LWithdrawals will be tax-free.
Neither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
# u& v! C3 M) i$ {/ z" P" V3 _Withdrawals will create contribution room for future savings.
5 L5 i& S5 [% U3 M* AContributions 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.
' l: r3 [# G2 Q" h# k# q  VQualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
- i  T' _6 q# z+ a, k/ k& VThe $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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