Tax Free Savings Account News

SIT Announces Support for Tax Free Savings Accounts

Toronto, Canada – May 5, 2008: Strategic Information Technology Limited (“SIT”) is pleased to announce that it will be supporting Tax Free Savings Accounts within the Portfolio Plus Investment Module. This Tax Free Savings Account (TFSA) software will be available to all Canadian financial institutions who currently have SIT’s Portfolio Plus banking software installed.

Introduced with the 2008 budget, the tax free savings account is a new type of registered account. Starting in 2009 Canadian residents 18 years or older can contribute up to $5,000 annually to their TFSA.

“SIT’s ability to plug-in new functionality to Portfolio Plus banking software, as needed, has been one of the keys to our success,” said G. Robert Leeming, President of SIT. “The TFSA capability is no different. We will be adding a new plan type to the existing portfolio of plan types within our investment module.”

SIT advises that business partners wishing to adopt the Tax Free Savings Account be ready for last minute changes by the federal government. SIT expects that there will be changes up until the very last minute of 2008 and that the tax submission XML file formats and layout will not be complete until late 2009 or early 2010. SIT also recommends that business partners communicate their plans as early as possible so SIT can schedule any installation, implementation, and training resources required. Those business partners who plan early will stand the best chance at having a successful launch.

The majority of Canadian analysts and economists have reacted positively to the legislation and believe that Canadians, young and old, will make use of this offering.

A quick recap of the features and restrictions of a TFSA include:

• In 2008 Canadians 18 and older can contribute up to a maximum amount of $5,000 a year to a TFSA. This figure will be increased, to the nearest $500, by the inflation rate for any particular year.
• Unused contribution room can be carried forward. There is no lifetime contribution limit.
• TFSA contributions are not deductible.
• Investments in the TFSA will grow tax-free.
• TFSA withdrawls can be made at any time and are tax free.
• Amounts withdrawn can be contributed to a TFSA later without reducing contribution room.
• Any amount withdrawn from a TFSA will not result in a clawback of any federal program like Old Age Security, the Guaranteed Income Supplement, the Age Credit, the GST credit, and the Canada Child Tax Benefit.
• Amounts in a TFSA can be pledged as collateral, unlike an RRSP.
• The TFSA can include investments in GICs, stocks, mutual funds, and bonds, like an RRSP.
• Contributions to a spouse or common-law partner's TFSA are allowed.
• The TFSA of a deceased holder can be passed tax-free to the TFSA of a spouse or partner.

About Strategic Information Technology Limited

SIT, formed in 1988, develops and markets Portfolio Plus, an extensible banking system that enables customers to plug-in new functionality as required. This is accomplished via SIT's unique Plug-In BankingTM architecture and a Financial Services Bus^TM that extends Portfolio Plus functionality to other corporate applications. SIT's banking software enables credit unions, banks, trust companies and building societies to offer web banking, loans, loan securitization, investments, term deposits, wealth management, retail, ATM/POS switch interfaces for debit cards, leasing, and credit bureau interfaces. Portfolio Plus can also be tailored, on request, to meet specific customer requirements.

SIT can be reached at (http://www.stratinfotech.com) or by phone at 905-640-0808.

Portfolio Plus, Plug-In Banking and Financial Services Bus are trademarks or registered trademarks of SIT in the U.S., Canada and other countries. Any other trademarks or service marks contained herein are the property of their respective owners.

For more information:
Patrick Lannigan
Strategic Information Technology
Telephone: 905-640-0808 x356
Email: patrickl@stratinfotech.com