The new gov't budget and the $5000 thing

[Canadian Bodybuilding]

From what I understand now. Every year you can put aside $5000 and the returns it brings you are tax free. Does it have to be in a special savings account or it can be anything like a GIC, RRSP, etc?

So at the end of the year, let's say you make $300 interest, does it go on to your next years $5000 tax free. So in otherwards, the next year you only put $4700 because the $300 of interest in calculated in there or it's a full $5000 each year and interest doesn't matter?

Not a bad thing after 10-20 years of saving.

[Demonwolf]

Ttt

[MuSuLPhReAk]

I also would like to know more about this. Does anyone know exactly what the rules are and how to go about it? Or even better, does anyone have a link to all the info needed?

[Canadian Bodybuilding]

Bingo. Got it.

http://www.budget.gc.ca/2008/pamphlet-depliant/pamphlet-depliant2-eng.asp

[Canadian Bodybuilding]

Basic rules

How the TFSA Works
Starting in 2009, Canadians aged 18 and older can save up to $5,000 every year in a TFSA.
Contributions to a TFSA will not be deductible for income tax purposes but investment income, including capital gains, earned in a TFSA will not be taxed, even when withdrawn.
Unused TFSA contribution room can be carried forward to future years.
You can withdraw funds from the TFSA at any time for any purpose.
The amount withdrawn can be put back in the TFSA at a later date without reducing your contribution room.
Neither income earned in a TFSA nor withdrawals will affect your eligibility for federal income-tested benefits and credits.
Contributions to a spouse’s TFSA will be allowed and TFSA assets can be transferred to a spouse upon death.

[Canadian Bodybuilding]

The page didn't answer my initial question though.

[Freebsd1977]

There must be a catch, sounds too good.

[St]

There must be a catch, sounds too good.

Yes once the Liberals get in they will get rid up it.I wouldn't waste my time,just look at the RESP the Tory's are fixing it today.

[Anatomy]

Looks like this might be their half-assed way of fulfilling a campaign promise to allow us to reinvest capital gains tax free

I need to look up the details but if I'm structuring the investment I can make damn sure that the investment returns 500% pa... I'm guessing there are rules prohibiting this