OK., here's a longer version

Answers

1. What is a Tax Free Savings Account?
   In the 2008 budget, the government of Canada introduced a brand new personal savings vehicle: the Tax-Free Savings Account (TFSA), to help you save for different purposes throughout your lifetime.
   
   This new account is the most important personal savings vehicle for Canadians since the introduction of the RRSP in 1957.
   
   As of January 2, 2009, you will be able to start contributing to a TFSA, which can hold any combination of eligible investment vehicles, such as cash, stocks, bonds, GICs and mutual funds, the growth of which will be tax-sheltered.
   
   Your Scotiabank advisor can help you plan how the TFSA can help you meet your savings and investment goals.
   
   
2. What are the benefits of a TFSA?
   A TFSA allows you to set money aside in eligible investments and watch those savings grow tax-free throughout your lifetime. Interest, dividends, and capital gains earned in a TFSA are tax-free for life. Your TFSA savings can be withdrawn from you account at any time, for any reason, and all withdrawals are tax-free.
   
   
3. How much money can I contribute to my TFSA in 2009?
   The 2009 contribution limit for each individual (18 years of age and older) is set at $5,000. Unused contribution room for 2009 is carried forward and added to your 2010 contribution limit. Any withdrawals made in 2009 will create additional contribution room for 2010.
   
   
4. How will a TFSA work for me?
   There's something for everyone with a TFSA and your Scotia advisor can help you decide how the TFSA can help you meet your goals. Here are some of ways that you can take advantage of this new savings vehicle:
   
   
Are you looking to save for a "rainy day"? A TFSA is an ideal all-purpose savings account that offers complete flexibility to save for a multitude of uses in one account., Your savings build up over time – tax-free, helping you reach your goals sooner, and, you can withdraw your money when you need it.

Do you have non-registered investments? A TFSA is an excellent choice if you have non-registered investments. The TFSA allows you to turn taxable income into tax-free income for life, by creating a more tax-efficient investment portfolio and enabling you to maximize your investment growth. You can contribute to a TFSA for a spouse or other family member. Spousal attribution rules don't apply as they would with an RRSP.

Are you retired or earning a pension income? A TFSA is also an ideal investment vehicle for depositing surplus RIF or pension income. It provides the ability to permanently tax-shelter non-registered GIC interest income. Deposits to a TFSA will not result in a claw back of government benefits like Old Age Security or the Guaranteed Income Supplement and there is there is no age threshold at which a TFSA must convert into a taxable account.


5. What types of investments can I hold in my TFSA?
   TFSA-eligible investments include mutual funds, Guaranteed Investment Certificates, savings accounts, stocks, and bonds. Investment options between Scotiabank, Scotia McLeod and Scotia McLeod Direct Investing may differ. Please consult your financial advisor for specific details on investment availability.
   
   
6. How is a TFSA different from an RRSP?
   
   Tax Free Savings AccountRRSPLimitsTax DeductibilityTax on IncomeWithdrawals

   Maximum 2009 annual contribution limit is $5,000 regardless of an individual's earned income	Contribution limit is based on an individual's earned income from the previous year, up to a maximum amount
   Contributions are not tax-deductible and therefore do not reduce taxable income	Contributions are tax-deductible and therefore reduce taxable income
   Income/returns earned on investments are tax-free	Income/returns earned on investments are tax-sheltered until withdrawn
   Withdrawals are not added to taxable income - they are tax-free	Withdrawals are added to taxable income and taxed at the applicable marginal tax rate

   
   
7. Can I withdraw money from my TFSA?
   You can withdraw money from your TFSA at any time however, specific product restrictions may apply, e.g. GIC maturity dates. The amount you withdraw can be put back in your TFSA starting the following year without impacting your contribution room.
   
   
8. Would contributions and withdrawals have any impact on my eligibility for federal income-tested benefits, such as the Canada Child Tax Benefit and the Guaranteed Income Supplement?
   Neither income earned in your TFSA, nor withdrawals, will affect your eligibility these types of benefits.
   
   
9. What happens if I contribute more than my contribution room?
   Similar to an RRSP, you will be charged an over-contribution penalty of 1% per month by the Canada Revenue Agency (CRA) on your excess contribution amount.
   
   
10. What happens to my TFSA if I die?
    You will have the option to transfer your TFSA assets to your spouse or common-law partner upon death without any impact on the survivor's existing contribution room.
    
    
11. How will I know what my TFSA contribution room is for a given tax year?
    Canada Revenue Agency (CRA) will provide details on your contribution room. CRA intends to report this amount to individuals on their Notice of Assessment and through the “My Account” function on the CRA web site.
    
    
12. Can I contribute to my spouse's TFSA?
    Yes. You will be able to contribute to a spouse's TFSA without affecting your own contribution room. Income attribution rules, which currently govern RRSPs, do not apply.
    
    
13. Would the income earned in that account be attributed back to me?
    No. Your spouse owns the TFSA and will earn any investment income and capital gains in the account.
    
    
14. Can TFSA assets be used as security for a loan?
    Yes. TFSA assets can be used as security for a loan.
    
    
15. Can a non-resident of Canada open a TFSA?
    No. TFSAs can only be opened by Canadian residents.
    
    
16. If I become a non-resident while I have a TFSA can I still make contributions?
    If you become a non-resident, you are able to maintain your TFSA and will not be taxed on any earnings or withdrawals in the account. However, you will not be allowed to contribute additional funds and no contribution room will accrue for the years in which you are a non-resident.
    
    
17. Why should I open a Scotia TFSA before January 1, 2009?
    Opening a TFSA is beneficial for you if you are:
    • Looking for advice on how the Scotia TFSA will help you better meet your savings and investment goals
    • Travelling outside of Canada during the winter months. This will ensure that you maximize your tax-free savings by setting up a contribution schedule for a TFSA prior to your departure
    • Eager to complete the account set-up process to start taking advantage of the tax-free benefits as early as possible, starting on January 2
    • Planning ahead and getting a head-start on the New Year in what is always a very busy season - RRSP contribution time.
      
      
18. How do I open my TFSA today?
    Get a head start on the new year and register for your TFSA account today.