At the end of last week, Mr. Flaherty switched a few rules on the TFSA to make sure investors don’t use abusing tax avoiding strategies (Does anybody have ever dreamed of paying less taxes in Canada anyway? Hahaha!).
#1 Some people purposely over contributed to their TFSA and made important returns to cover for the 1%/month penalty. Therefore, the tax advantage was more important than the penalty for short moves (in and out). From now on, profit made from this kind of strategy will become fully taxable (read 100% taxable!).
#2 Account transfer from non-registered or registered account to TFSA will be prohibited due to tax avoidance possibilities.
#3 As it is the case with RRSP’s some investment are prohibited inside a TFSA. Before the new TFSA rules, they were penalized but the gain from holding such investment remained tax free. From now on, any reasonable gains will be fully taxable… once again!
On last announcement, make sure to submit your best frugal post at the Festival of Frugality that will be published on Gather Little By Little next week!
So enough with TFSA rules, let’s read some great articles this weekend:
Intelligent Speculator discusses the flaws of fixed income etf’s.
The Credit Toolbox is suggesting to take any call… you might save money!
Million Dollar Journey is asking why don’t most financial planners plan finances?
Four Pillars is demystifying the myth of computer nerds.
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