Feb. 6, 2009
FREDERICTON (CNB) - Amendments will be proposed during the upcoming session of the Legislative Assembly to clarify how the proceeds from tax-free savings accounts (TFSAs) would pass to beneficiaries after the death of an account holder. Finance Minister Victor Boudreau made this announcement today.
"We feel that this change supports the use of TFSAs and will allow New Brunswickers to benefit more fully from this new savings vehicle," said Boudreau.
As announced in the federal government's 2008 budget, TFSAs became available on Jan. 1. Canadian residents 18 years and older are eligible to contribute up to $5,000 annually to a TFSA. Contributions to a TFSA are not tax deductible, but investment income earned in a TFSA and TFSA withdrawals will not be taxed.
"The Government of New Brunswick supports the introduction of TFSAs as it is consistent with the province's objective of generating income and wealth for New Brunswickers by encouraging greater savings," said Boudreau. "Our proposed amendments would help facilitate the use of these accounts by simplifying how the proceeds of TFSAs would pass to designated beneficiaries."
With the proposed amendments, where an account holder has designated a beneficiary, upon the death of the holder, the account assets would transfer directly to the beneficiary rather than forming a part of the estate. This would mean that the beneficiary would not have to wait for the estate to be settled to gain access to the funds, and the assets would not be subject to probate fees.
For more information on TFSAs, visit www.cra.gc.ca.
MEDIA CONTACT: Marc Belliveau, communications, Department of Finance, 506-453-4138.