Government helps Canadians maximize their savings with the new Tax-Free
Savings Account
Ottawa (Ontario), January 2, 2009. The Honourable Jim Flaherty, Minister
of Finance, the Honourable Jean Pierre Blackburn, Minister of National
Revenue and Minister of State (Agriculture), and Mr. Peter Aceto, President
and CEO of ING DIRECT Canada, today welcomed the availability of the new
Tax-Free Savings Account (TFSA) introduced by the Government of Canada in
the 2008 Budget.
"The Tax-Free Savings Account is the single most important personal
savings vehicle since the introduction of the RRSP," said Minister Flaherty.
"It will give Canadians more flexibility than ever in saving for the future.
Effective January 1, Canadians 18 years of age and older can set aside up to
$5000 every year in a variety of savings options and never pay tax on the
income earned or on withdrawals."
"The Government of Canada wants to help Canadian taxpayers better meet
their savings goals," said Minister Blackburn. "We believe that within the
next 15 to 20 years, 90 per cent of Canadians will hold all of their
financial assets in tax-efficient savings vehicles, either through existing
tax-deferred plans or this new savings account. The Canada Revenue Agency is
working with Canadian financial institutions to ensure seamless
administration of these vehicles."
"We are thrilled at the opportunity to give our clients more power to
save their money by investing in a Tax-Free Savings Account," said Mr. Aceto.
"The flexibility built into the TFSA makes it appealing to all savers,
whether they are saving for the short or long term and regardless of their
tax rates. This is a terrific new opportunity that deserves the attention of
all Canadians and we are excited to celebrate the launch."
The income earned within a TFSA and withdrawals from the account will
have no effect on eligibility for federal income-tested benefits or credits,
such as the Canada Child Tax Benefit, the goods and services tax credit, Old
Age Security, or the Guaranteed Income Supplement. A TFSA can contain
different types of investments, similar to those in an RRSP, such as mutual
funds, listed securities, and guaranteed investment certificates.
Other important information that Canadians should know about how the TFSA
works include:
- Unused TFSA annual contribution room is carried forward and
accumulates into future years.
- The full amount of withdrawals can be put back into the TFSA in future
years.
- Contributions are not tax-deductible.
- Funds can be given to a spouse or common-law partner for them to
invest in their TFSA.
- TFSA assets can generally be transferred to a spouse or common-law
partner upon death.
For more information, go to www.tfsa.gc.ca.
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