There hasn’t been too much news and happenings when it comes to tax free savings accounts since its launch. I would say the highlights would be how the interest rates took a huge dive which kind of killed the excitement of it for many.
However, I was just browsing around and reading a piece about the government of Canada proposing to add the following amendments to the income tax act in regards to how TFSA’s work:
-Make any income attributable to deliberate overcontributions and prohibited investments subject to existing anti-avoidance rules in the Income Tax Act.
-Make any income attributable to non-qualified investments taxable at regular income tax rates.
– Ensure that withdrawals of deliberate overcontributions, prohibited investments, non-qualified investments or amounts attributable to swap transactions, or of related investment income, from a TFSA do not create additional TFSA contribution room.
– Effectively prohibit asset transfer transactions between TFSAs and other accounts.
I suppose it is a direct attempt to prevent intentional abuse of the plan where one can avoid paying income taxes on their investments. An example would be someone intentionally over contributing to their account where the investment would then generate more money than the actual 1% penalty fee you would have to pay.
This doesn’t really affect the average person though that simply uses the account more as a savings account. Basically, I’m sure most people just want higher interest rates.