Starting in 2009, Canadian residents aged 18 years and older will be entitled to open a TFSA.

Contributions

• Individuals may contribute $5,000 per year to a TFSA.
• Contributions to TFSAs are not deductible for income tax purposes, but investment income grows tax-free. In addition, income and capital gains    withdrawals are not taxable.
• Unused TFSA contribution room may be carried forward to future years.
• The contribution amount is indexed to the Consumer Price Index and rounded to the nearest $500.
• A TFSA can include different investment solutions, such as GICs, mutual funds, stocks and bonds.
• Excess contributions are subject to a 1% tax every month until they are withdrawn.

Withdrawals

• You can withdraw funds from the TFSA at any time for any purpose.
• The amount withdrawn can be put back in the TFSA without reducing your contribution room.
• Neither income earned in a TFSA nor withdrawals will affect your eligibility for federal income-tested benefits and credits.
• Funds can be given to your spouse to contribute in his own TFSA, and TFSA assets can be transferred to a spouse upon death without tax implications.