http://www.four-pillars.ca/2009/04/15/resp-contributions-and-a-reader-question/

Here are some main principles I stick to with regards to each account.

Registered Savings Plan (RSP):

* Contributions eligible for tax rebate at your marginal tax rate
* All gains compound on a tax deferred basis
* Exempt from US withholding tax on dividends paid by US corporations
* 2009 individual contribution limit is 18% of annual income, but no more than $21,000
* Canadian paid dividends not eligible for dividend tax credit
* Must be converted to RRIF (registered retirement income fund) at age 71

Tax Free Savings Account (TFSA):

* Contributions not eligible for tax rebate
* All gains compound tax free
* Withholding tax on income paid as dividends from US corporations has not been indicated yet by the CRA on eligibility to exemption
* 2009 individual contribution limit is $5,000 regardless of income
* Canadian paid dividends not eligible for dividend tax credit
* No conversion necessary at any age

Non-Registered Account:

* Contributions not eligible for tax rebate
* All realized investment gains taxed directly at varying tax rates
* 15% of income paid in dividends from US corporations withheld
* No contribution limit
* Canadian dividends eligible for dividend tax credit
* No conversion necessary at any age

Foreign dividends are not eligible for the dividend tax credit and are taxed at your full marginal tax rate when earned outside of an RRSP or TFSA, seemingly making them ideal for your RRSP or TFSA. But the problem with foreign dividends is that in most cases, a foreign non-resident withholding tax is applied by the foreign jurisdiction before the dividend is received in Canada.

If you hold the foreign stock in a non-registered account, you can claim a foreign tax credit against your Canadian tax payable for the amount of tax withheld. But if the foreign dividend is paid into an RRSP or TFSA, the foreign tax withheld is non-recoverable and no credit is available.

The Canada-United States tax treaty exempts U. S. dividends from withholding tax when paid to an RRSP or RRIF. But that same break does not apply to a TFSA, making U. S. dividend-paying stocks better off in RRSPs.

Re: In-kind transfers:
You should instead sell the stock while it’s still non-registered, transfer the cash into the TFSA, and then wait at least 30 days to avoid the superficial loss rules which otherwise would apply if you re-purchased the identical stock.

Re: Swaps:
Golombek has no problem with the swap strategy, but says the same thing can be accomplished without the swap. “Why not just sell stock inside the TFSA for $15,000? Now we have $15,000 cash inside the TFSA. If you still want to hold the stock, buy $15,000 worth for your non-registered account. It accomplishes the same thing.”

However, Skinder says the swap may be advantageous for less liquid securities, private companies, options or warrants.

So yes, you can recontribute the amount you withdrew the year before…awesomesauce!

http://www.financialwebring.org/forum/viewtopic.php?p=300738#300738

Intuitively this means that you want to put the better performing investments in the TFSA, and the worse performing investments in the RRSP - since the benefit of the RRSP (tax break on input) occurs regardless of your returns, while the benefit of the TFSA (tax break on growth) is directly proportional to how much growth occurs (no growth, no break).

The math showing that they are equivalent is flawed in that it ignores the fact that investments in both vehicles are capped - effectively it assumes that your RRSP investment is larger to start wtih because of the pre-tax input, and that exactly cancels out with TFSA on the back end due to additional tax on withdrawal (on a higher principal) - but simply contributing to an RRSP does not increase your RRSP room, yet calculations that show them as equivalent implicitly assume this!

The flaw here is here is that many people will be a situation to maximize one of or both their RRSP and TFSA (especially those with minimal RRSP room due to low income, non residency or pension adjustment), and this means that you cannot compare pre-tax dollars in an RRSP with after-tax dollars in the TFSA, because contribution room is always consumed by after tax dollars.
…
The moral of the story is that if you are investing in both an RRSP and the TFSA, you should favor putting higher growth/yield investments in the TFSA.