H2B ISA and LISA confusion

thejinkazama · 21 February 2018 at 7:43PM

Hello,

I have close to 6k in my Help to Buy ISA. I also have a LISA set up from last year with £1 which I could transfer to. My partner and I have concluded the missives on our property which is expected to be completed by August/September.

What is the best option for me to do to maximise my bonus potential? Do I run the risk of creating problems for myself with solicitors or developer if my Help to Buy changes into a LISA?

Thanks

Alexland · 21 February 2018 at 9:15PM

As long as the LISA has been open 12 months from the initial contribution by the time you withdraw the money for a qualifying property purchase you should be fine. You need to act quickly to get the HTB ISA transfered. Talk to your solicitor first. Who is your LISA provider?

thejinkazama · 22 February 2018 at 8:56PM

Skipton is the provider.

Alexland · 23 February 2018 at 5:24AM

That's fine they accept HTB transfer requests (Inc previous tax year contributions) if initiated in the next few days.

thejinkazama · 24 February 2018 at 9:40PM

Thanks. I'm unable to work out if I'd be financially better off though.

Alexland · 24 February 2018 at 11:17PM

Do you have more money available to put towards the deposit than the HTB product limit of £200 per month? Would the larger LISA contribution limit of £4000 per year be beneficial to getting a bigger 25% bonus?

What exact date did you open the LISA - will 12 months have passed allowing an extra 1 month for the admin?

thejinkazama · 25 February 2018 at 10:07AM

Hi again,

Thanks for your reply. I've checked my emails and the LISA was opened on 5th September 2017. Going by what you've said, we will potentially miss out at the house could be ready as early as August. Should I therefore stick with the H2B ISA?

Alexland · 25 February 2018 at 3:41PM

Sounds like you should stick to the HTB for now if you are confident this house purchase will complete in those timescales.

benjonezy92 · 25 February 2018 at 10:39PM

Hi everyone,

I was hoping that someone might be able to help me answer these 2 questions, before I decide on whether to change my existing H2B to a LISA before the March 1st deadline::

1. Can the £4,000 annual allowance be paid in at ANYTIME during the financial year? For example, if I put in £4,000 on say, April 1st 2019, and then another £4,000 in the new financial year on April 6th, 2019... Would I still be eligible for the full bonus?

2. Will I lose any money from the LISA as a penalty if I take out any money within the first year of opening it?

Any advice on these questions would be much appreciated :-)!

B

Alexland · 25 February 2018 at 11:23PM

1 - yes you can contribute the up to £4k at anytime during the tax year. So you could make two £4k contributions within a few days over a tax year end/start.

2 - the early withdrawal penalty applies from 6th April 2018 onwards. You might be confused with the 12 months required between initial LISA deposit and withdrawal for a qualifying property purchase to avoid penalty?

H2B ISA and LISA confusion

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