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.
' m& g- K5 o0 z4 W4 IContributions will not be deductible.
Capital gains and other investment income earned in a TFSA will not be taxed.
6 |3 i7 c: C* d5 m2 @, n! kWithdrawals will be tax-free.
, H' i! C' Y9 T4 ENeither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits.
; e: ?/ t  ~- i( k% C2 oWithdrawals 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.
/ l& Q! G; v# M/ |9 Z6 X" EQualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
& D+ v/ A# C2 [) h; ^7 h, s; g5 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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