TFSA news...
posted on
Oct 19, 2009 04:28PM
San Gold Corporation - one of Canada's most exciting new exploration companies and gold producers.
Traps et al, for your TFSA planning information: The Honourable Jim Flaherty, Minister of Finance, today proposed amendments to the Income Tax Act to strengthen the rules applicable to Tax-Free Savings Accounts (TFSAs). The TFSA was introduced in Budget 2008. Since January 1, 2009, Canadian residents who are 18 years of age or older are eligible to contribute up to $5,000 annually to a TFSA. The TFSA is a flexible, registered, general purpose account that allows Canadians to maximize their savings by earning tax-free investment income. Contributions to a TFSA are not tax-deductible, but investment income earned in a TFSA, as well as TFSA withdrawals, are tax-free. The proposed amendments respond to recent concerns that have arisen regarding the use of TFSAs in tax-planning schemes. The proposed amendments would: "These proposals will ensure that the TFSA remains viable and strong for Canadians today and in the future and the use of inappropriate transactions to draw excessive benefits are avoided," said Minister Flaherty. As with the existing TFSA legislation, the Minister of National Revenue will maintain, in appropriate circumstances, the discretion to waive or cancel all or part of any tax that would otherwise be payable because of the application of today's proposals. Given the clear intent of the TFSA concept, Minister Flaherty has asked the Honourable Jean-Pierre Blackburn, Minister of National Revenue, to ensure that the Canada Revenue Agency closely examines any unusual TFSA transactions that have occurred to date, and to apply the existing TFSA rules to challenge aggressive tax planning where appropriate. The proposed amendments are to apply to transactions that occur after today. The Government will introduce legislation at an early opportunity.