Ontario Simplifies Tax-Free Savings Accounts
June 16, 2009 11:30 AM
McGuinty Government Streamlines Paperwork and Reduces Costs for Ontarians
The Ontario government announced today that holders of Tax-Free Savings Accounts (TFSA) are now able to designate beneficiaries for their accounts.
TFSAs were introduced by the federal government in 2008 as registered savings accounts that let taxpayers earn investment income tax-free. Canadian residents age 18 or older can contribute up to $5,000 annually to a TFSA.
Designating a beneficiary allows a TFSA owner's funds to flow more directly to loved ones at the time of death. With this measure, which was proposed as part of the 2009 Ontario Budget, a beneficiary will receive funds outside of a will in the same way that beneficiaries currently receive proceeds of registered retirement savings plans.
Quick Facts
- Any beneficiary designations that have been made on existing accounts will remain legally effective. TFSA owners can contact their financial institution for assistance in making a beneficiary designation.
- When a person dies, the value of the estate is determined under the Estates Act and the Estate Administration Tax Act, and applies to personal property and real estate.
Learn More
- Read the 2009 Ontario Budget highlights.
- Calculate your potential tax savings on the Business and Corporate Income Tax Calculator.
- Calculate your potential tax savings on the Tax Relief Calculator.
- Read more about the federal government's Tax-Free Savings Account.
Ministry of Finance
ontario.ca/finance