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.
! f" e) x; ^* c5 o2 {! [Contributions will not be deductible.
3 w! [3 {& a- j: o3 C9 f2 ?Capital gains and other investment income earned in a TFSA will not be taxed.
/ _2 c4 a5 v7 m0 o! L% B' @Withdrawals will be tax-free.
Neither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
, F& g' B3 y  ~Withdrawals will create contribution room for future savings.
5 W& G3 D# E3 |% a+ ^' ~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.
Qualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
: c5 i1 Q) \, a+ o6 z! m; tThe $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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