H2B into LISA

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nodoshleft
nodoshleft Posts: 1 Newbie
in ISAs & tax-free savings
Hi I have just opened a LISA with Skpton, if I transfer my previous years H2B contributions into this and leave my 2017/18 payments in my H2B ISA can I then put £4000 into my LISA and continue paying into my H2B to max out both for this year. I know I can only get the bonus on one.
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  • Ed-1
    Ed-1 Posts: 3,892 Forumite
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    nodoshleft wrote: »
    Hi I have just opened a LISA with Skpton, if I transfer my previous years H2B contributions into this and leave my 2017/18 payments in my H2B ISA can I then put £4000 into my LISA and continue paying into my H2B to max out both for this year. I know I can only get the bonus on one.

    Yes.......
  • where_are_we
    where_are_we Posts: 1,001 Forumite
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    I am helping one of my children do exactly this from a Halifax HTB ISA. We contacted the Halifax to confirm the pre 2017/2018 amount to enter into the Skipton transfer form and was given the balance at 5/4/17 including all annual interest payments. The last annual interest payment was in December 2016. I presume any interest earned between this date and 5/4/17 will not be included. Is this correct?
    I was also dismayed to be told by the Halifax representative that you could not contribute to a LISA and a HTB ISA in the same year ie 2017-2018, because he said you can contribute into only one cash ISA in a year. I told him he was incorrect but he insisted that he was not wrong.
  • jamesunisaver
    jamesunisaver Posts: 5 Forumite
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    "The impact on your LISA allowance of transferring a Help to Buy ISA in depends on when you contributed. All money contributed to a Help to Buy ISA before LISAs launched (ie, before 6 April 2017) can be transferred in without affecting your LISA allowance – and you can get both the max £1,000 LISA bonus, plus the bonus on that Help to Buy ISA cash on top. Any money you contribute to the Help to Buy ISA after LISAs launch however will eat up your LISA allowance."

    The above paragraph was copied from Martin's page assisting with the technicalities of the Help to Buy Isa and Lifetime ISA.
  • Wagas
    Wagas Posts: 14 Forumite
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    where_are_we wrote: »
    I am helping one of my children do exactly this from a Halifax HTB ISA. We contacted the Halifax to confirm the pre 2017/2018 amount to enter into the Skipton transfer form and was given the balance at 5/4/17 including all annual interest payments. The last annual interest payment was in December 2016. I presume any interest earned between this date and 5/4/17 will not be included. Is this correct?

    This is what I am also presuming.
    where_are_we wrote: »
    I was also dismayed to be told by the Halifax representative that you could not contribute to a LISA and a HTB ISA in the same year ie 2017-2018, because he said you can contribute into only one cash ISA in a year. I told him he was incorrect but he insisted that he was not wrong.

    I also think he is wrong as a LISA is not considered to be a cash ISA is it?
  • Owen1991
    Owen1991 Posts: 70 Forumite
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    Wagas wrote: »
    This is what I am also presuming.



    I also think he is wrong as a LISA is not considered to be a cash ISA is it?

    You can contribute to both, he is wrong.
    2021 - £11250 Saved || 2020 - £4750 Saved || 2019 - £4000 Saved || 2018 - £9000 Saved
  • Alexland
    Alexland Posts: 9,653 Forumite
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    Halifax people are not trained to understand products they don't sell so should avoid commenting really.
  • eskbanker
    eskbanker Posts: 31,076 Forumite
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    Wagas wrote: »
    where_are_we wrote: »
    I am helping one of my children do exactly this from a Halifax HTB ISA. We contacted the Halifax to confirm the pre 2017/2018 amount to enter into the Skipton transfer form and was given the balance at 5/4/17 including all annual interest payments. The last annual interest payment was in December 2016. I presume any interest earned between this date and 5/4/17 will not be included. Is this correct?
    This is what I am also presuming.
    Interest earned but not paid into the HTB as at 5 April 2017 should also be included in the pre-2017/18 amount that doesn't count towards the £4K LISA limit for 2017/18, according to the Treasury letter of 18 April 2017 clarifying this:
    The amount that can be transferred from a Help to Buy: ISA to a Lifetime LISA in the 201718 tax year without being treated as a contribution to the Lifetime ISA is the value in the Help to Buy: ISA account as at 5 April 2017 plus any interest that has accrued on that amount, but not yet been paid into the Help to Buy: ISA account, as at 5 April 2017.
    So, on the face of it Halifax aren't using the correct calculation, but convincing them of this may not be straightforward - if you feel strongly enough about the principle then try directing them towards that letter and see what they say....
  • where_are_we
    where_are_we Posts: 1,001 Forumite
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    It is not worth the trouble to try to get Halifax to calculate the interest earned on the HTB ISA between the last interest payment in December 2016 and 5/4/17 (roughly £35) and persuade them to add that to the balance at 5/4/17 (£4284) that they have already quoted.
    My daughter still plans to contribute £4000 to the Skipton Lisa this tax year in addition to the £4284 transferred from her HTB ISA and continue contributing £200 a month to the Halifax HTB ISA because it pays 3.5% interest. She will thus contribute £2400 to her HTB ISA this tax year, £4000 new cash to her LISA (plus the £4284 transfer) and be well within her £20,000 annual ISA limit. Is this OK?
  • New_Money_Saver
    New_Money_Saver Posts: 2 Newbie
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    I am interested in opening the Skipton cash LISA to "start the clock running" so to speak. I currently have several ISAs with my bank (HSBC): a H2B, a stocks and shares and an older cash ISA. I have already contributed to the H2B and stocks and shares ISAs this tax year. Can I still open the LISA? If so can I do it with £1 cash or would I need to do a balance transfer from one of my other ISAs? I was reading the article and the posts above and am a bit unclear as to whether the LISA is considered a cash ISA. i.e. can I contribute to a cash, a LISA and a stocks and shares all within the same year?

    I am not sure whether to move the H2B into the LISA or not. The base interest rate is better on the H2B and I don't know for definite that I'll be spending the money on a first home, but if I do it will likely be more expensive than the 250k limit for H2B. What is the general consensus on this?

    Thanks
  • New_Money_Saver
    New_Money_Saver Posts: 2 Newbie
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    Additional query: if the government bonus is paid into the LISA yearly, does that mean it then begins to attract the base-rate interest in year 2?
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