Paying into a Cash ISA, if you have a Help to Buy ISA
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R11_BFC
Posts: 25 Forumite
I maybe being thick here...but hey ho!
At launch date my daughter opened a Help to Buy ISA and at the time Martin stated:
You’re not supposed to contribute to a Help to Buy ISA and a Cash ISA in the same year…
...the rules say you can’t open a cash ISA and a Help to Buy ISA at the same time in the same tax year. Though nothing prevents you opening a Help to Buy ISA if you have cash ISAs from previous years, or a stocks & shares ISA from any year...
On the link below:
http://www.moneysavingexpert.com/savings/help-to-buy-ISA
So i told my daughter not to pay into her existing Cash ISA...which was correct (i think!). But (and whilst i know most ISA rates are naff and this is before i even get onto Lifetime ISAs!) can she now pay into her Cash ISA, even if she's still paying into her Help to Buy ISA or does the rule still stand (if i'm reading it right that is)?
If i am reading it right (i'm not sure why they had to put the rule in the first place tbh) i'm now confused whether it's just for the first year of opening or an ongoing rule?
Does that make sense? If so, well done! And any help appreciated.
Bottom line - can she now pay into her existing Cash ISA if she wanted to, along with paying into her Help to Buy ISA?
At launch date my daughter opened a Help to Buy ISA and at the time Martin stated:
You’re not supposed to contribute to a Help to Buy ISA and a Cash ISA in the same year…
...the rules say you can’t open a cash ISA and a Help to Buy ISA at the same time in the same tax year. Though nothing prevents you opening a Help to Buy ISA if you have cash ISAs from previous years, or a stocks & shares ISA from any year...
On the link below:
http://www.moneysavingexpert.com/savings/help-to-buy-ISA
So i told my daughter not to pay into her existing Cash ISA...which was correct (i think!). But (and whilst i know most ISA rates are naff and this is before i even get onto Lifetime ISAs!) can she now pay into her Cash ISA, even if she's still paying into her Help to Buy ISA or does the rule still stand (if i'm reading it right that is)?
If i am reading it right (i'm not sure why they had to put the rule in the first place tbh) i'm now confused whether it's just for the first year of opening or an ongoing rule?
Does that make sense? If so, well done! And any help appreciated.
Bottom line - can she now pay into her existing Cash ISA if she wanted to, along with paying into her Help to Buy ISA?
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Comments
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Bottom line, no. Unless she uses a split-ISA provider, like Nationwide.
The rule is that you can't pay money into more than one ISA of each type per tax year. The HTB ISA is a cash ISA, it is not a separate type of ISA.0 -
Bottom line, no. Unless she uses a split-ISA provider, like Nationwide.
The rule is that you can't pay money into more than one ISA of each type per tax year. The HTB ISA is a cash ISA, it is not a separate type of ISA.
Bit surprised by that, as it seems to read in the same year...anyway, she hasnt done - so phew! And no, she doesnt have one of those split thingys.
Thanks for such a quick response btw. Any chance of answering another question?
What's the crack with Lifetime ISAs on this rule? In that, as there doesnt seem to be many offers knocking around (appreciate they dont kick in til 6th April but not looking good at the moment); i think im right in saying that Martin has said to carry on paying in to a Help to Buy ISA.
BUT...if at a later stage, she wants to open a Lifetime ISA (as she'll want to do, re being able to save more = more bonuses and also not limited to £3000 over the term.), could this rule kick in, i.e. that she wouldnt be able to open a Lifetime ISA, as she's been paying into a Help to Buy ISA, or are there now different rules? Why do we need rules?!
Help!0 -
A Lifetime ISA will be a different type of ISA, so it will be possible to pay into that and a cash ISA (e.g. HTB ISA) in the same tax year, just like you can currently pay into a cash ISA and S&S ISA in the same tax year.
If she will be transferring her HTB ISA into a LISA in due course, then any money paid in next tax year will come out of the £4000 LISA allowance.0 -
A Lifetime ISA will be a different type of ISA, so it will be possible to pay into that and a cash ISA (e.g. HTB ISA) in the same tax year, just like you can currently pay into a cash ISA and S&S ISA in the same tax year.
If she will be transferring her HTB ISA into a LISA in due course, then any money paid in next tax year will come out of the £4000 LISA allowance.
Hey...you're a top lad/lass. ;o)
So basically, i need to stop panicking?!
If say, some good Lifetime ISAs come along in a few months, the fact, she's already paid into her Help to Buy ISA wont cause a problem then and we can just set one up and do a transfer of funds/close the Help to Buy ISA? There's no point her having both, as it's just for her first house purchase.
You dont need to answer this...you've been more than helpful. But i dont really get why a Lifetime ISA is a different type of ISA - seems very similar to a Help to Buy ISA. To me anyway! But as you can tell...i'm no expert, like you.0
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