Paying into Help 2 Buy ISA and LISA
charlpears
Posts: 50 Forumite
Hi all,
Apologies if this question has been asked many times, I have had a look through recent threads and can’t see my exact situation!
Both my husband and I have a Help to Buy ISA which we opened in the 2016/17 tax year. We have paid into it regularly since then including this tax year as well. We have both just opened up LISAs with Skipton as we want to get the 12 month period started, so I paid in £1 each.
After doing this I had a sudden thought about the “subscribing” to two ISAs per year. Have I broken the ISA rules doing this? Should I stop paying into the Help to Buy ISA now for the rest of the tax year? Our plan waas to wait until the last minute to transfer over from the HTB to the LISA, or to just leave the money in the HTB (and not pay into it after April) and start paying into the LISA from the new tax year.
If I’ve broken the rules I’m guessing if I close the LISA in the next 30 days in accordance with Skiptons rules then it will undo the breaking?!
Thanks in advance!
Apologies if this question has been asked many times, I have had a look through recent threads and can’t see my exact situation!
Both my husband and I have a Help to Buy ISA which we opened in the 2016/17 tax year. We have paid into it regularly since then including this tax year as well. We have both just opened up LISAs with Skipton as we want to get the 12 month period started, so I paid in £1 each.
After doing this I had a sudden thought about the “subscribing” to two ISAs per year. Have I broken the ISA rules doing this? Should I stop paying into the Help to Buy ISA now for the rest of the tax year? Our plan waas to wait until the last minute to transfer over from the HTB to the LISA, or to just leave the money in the HTB (and not pay into it after April) and start paying into the LISA from the new tax year.
If I’ve broken the rules I’m guessing if I close the LISA in the next 30 days in accordance with Skiptons rules then it will undo the breaking?!
Thanks in advance!
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Comments
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charlpears wrote: »Hi all,
Apologies if this question has been asked many times, I have had a look through recent threads and can’t see my exact situation!
Both my husband and I have a Help to Buy ISA which we opened in the 2016/17 tax year. We have paid into it regularly since then including this tax year as well. We have both just opened up LISAs with Skipton as we want to get the 12 month period started, so I paid in £1 each.
After doing this I had a sudden thought about the “subscribing” to two ISAs per year. Have I broken the ISA rules doing this? Should I stop paying into the Help to Buy ISA now for the rest of the tax year? Our plan waas to wait until the last minute to transfer over from the HTB to the LISA, or to just leave the money in the HTB (and not pay into it after April) and start paying into the LISA from the new tax year.
If I’ve broken the rules I’m guessing if I close the LISA in the next 30 days in accordance with Skiptons rules then it will undo the breaking?!
Thanks in advance!
No, you haven't broken any ISA rules. You're allowed to pay into one of each type of ISA each tax year.
A HTB is a variety of Cash ISA, but a LISA is a separate type, so you're fine.
Obviously you will both only be able to use the bonus from either the HTB or the LISA towards your first home.
Don't leave transferring your HTBs until the last minute though;)0 -
My kids have the HTB plus £1 each in Skipton. Want to take advantage of getting both bonuses by transferring the HTB into the Lisa this month.
My daughter has £5200 in her HTB so can transfer £4000 into the Lisa and keep £1200 in the HTB.
My son only has £600 in his HTB so will lose this account when he transfers this money to Skipton.
Will both my children get both bonuses this year, please? Want to maximise their money.
Thanks to anyone who can assist!0 -
Winnie2012 wrote: »My kids have the HTB plus £1 each in Skipton. Want to take advantage of getting both bonuses by transferring the HTB into the Lisa this month.
My daughter has £5200 in her HTB so can transfer £4000 into the Lisa and keep £1200 in the HTB.
My son only has £600 in his HTB so will lose this account when he transfers this money to Skipton.
Will both my children get both bonuses this year, please? Want to maximise their money.
Thanks to anyone who can assist!
Each child can only use either the HTB ISA or the LISA bonus towards a property purchase so it makes sense to transfer all of the daughter's HTB ISA into the LISA. Some of her £5,200 contributions will have been in previous tax years so will not count towards the £4,000 limit for contributions this tax year. She will probably have only contributed £2,000 so far this tax year (10 months at £200 per month). As such she can transfer it all across and add nearly £2,000 (minus any interest earned this tax year in the HTB ISA) before 5th April.
For the son unless he is likely to increase his contribution rate or buy a house above £250k outside London then he may be better staying with the HTB ISA for the better interest rate.
The first LISA bonus in relation to contributions up to and including this tax year should be paid into the account in late April or early May.
Alex.0 -
Thank you Alex.
Neither child ready to buy a property for about 5 yrs. Both at uni now.
Martin Lewis talked about for this year only, getting a bonus on both HTB and Lisa if transferred before 1.4.18.
I just want to maximise my kids' money but still not sure if they would get this bonus on both accs in this scenario.
Martin hasn't covered this in his extensive coverage.0 -
Winnie2012 wrote: »Thank you Alex.
Neither child ready to buy a property for about 5 yrs. Both at uni now.
Martin Lewis talked about for this year only, getting a bonus on both HTB and Lisa if transferred before 1.4.18.
I just want to maximise my kids' money but still not sure if they would get this bonus on both accs in this scenario.
Martin hasn't covered this in his extensive coverage.
If you want to transfer the Skipton cutoff is the end of February. Once the money is in a LISA they should see the bonuses added in late April or early May. However the low interest rate on the LISA may errode the spending power over 5 years.0 -
No, you haven't broken any ISA rules. You're allowed to pay into one of each type of ISA each tax year.
A HTB is a variety of Cash ISA, but a LISA is a separate type, so you're fine.
Obviously you will both only be able to use the bonus from either the HTB or the LISA towards your first home.
Don't leave transferring your HTBs until the last minute though;)
Thanks badger!! I didn’t realise they were different types of ISA so that’s great news. We are just waiting to see when the house may be ready (new build) and if after next Feb will transfer over before March 1st!0 -
Thank you for your help.0
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