TFSA - changing the rules

[trent]

They are changing the TFSA rules :

http://www.fin.gc.ca/n08/09-099-eng.asp

I wonder how long until they do an old-fashined government tax-grab and decide to tax the TFSA? I guess they'll have to change the name of the acount at this point, from Tax Free Savings Account to maybe No Free LuCh Account

[Canadian]

Originally Posted by trent

They are changing the TFSA rules :

http://www.fin.gc.ca/n08/09-099-eng.asp

I wonder how long until they do an old-fashined government tax-grab and decide to tax the TFSA? I guess they'll have to change the name of the acount at this point, from Tax Free Savings Account to maybe No Free LuCh Account

I hope the government never taxes the TFSA. If they do this will be a huge disaster.

[Rickson9]

Originally Posted by Canadian

I hope the government never taxes the TFSA. If they do this will be a huge disaster.

Yeah, that would suck, but I also recognize that I live at the mercy of the Canadian government...

[Richard]

The government is changing the rules because people are dumping $10,000 into their TFSA, buying stock, selling the stock after it jumps a few bucks, then pulling the money out. Meanwhile, the gains they made on the market stay behind tax-free. It's worth trading through the loophole if they can make more than the 1% penalty they have to pay because of it. The government wants there to be a 100% penalty for any capital gains from overcontributing.

-Richard
http://insider-banking.blogspot.com

[trent]

Originally Posted by Richard

The government is changing the rules because people are dumping $10,000 into their TFSA, buying stock, selling the stock after it jumps a few bucks, then pulling the money out. Meanwhile, the gains they made on the market stay behind tax-free. It's worth trading through the loophole if they can make more than the 1% penalty they have to pay because of it. The government wants there to be a 100% penalty for any capital gains from overcontributing.

-Richard
http://insider-banking.blogspot.com

Yes, but one has to wonder how much thought did they put in the design of the TFSA if they have to change it after it has been used for only a few months?

[Richard]

True. I guess they thought a 24% interest rate would be enough of a deterrant but apparently it wasn't. Now they're hoping a 100% tax rate will be a deterrant. We'll have to see if that works. If not, they'll make them more complicated I'm sure.

-Richard
[PUT URL IN YOUR SIGNATURE]