Using HTB ISA as a regular saver transferring annually to LISA?

Hi,

I've got a HTB ISA @ 3.5% interest. Was thinking of opening a LISA with the minimum, and then transfer balance at 5 April 2017 to the LISA this tax year (which would not use up this tax year's allowance) and then the remainder transfer in March 2018 with all the remaining HTB balance plus all the future payments into the HTB ISA up to mid-March 2018. Various pages, including MSE's guide say this is OK.

Can I then continue to use the HTB ISA as a regular saver, 200 per month, and transfer the balance in mid-March 2019 into the LISA (with the remainder of 4000 - (12 * 200) being deposited into the LISA in early tax year starting 2018)?

And continue to do that for as long as I need in order to build a deposit?

Or can transfers from HTB ISA to LISA only happen in this tax year and cannot be done after start of tax year 2018? (not sure the literature i've seen so far is explicit in this)

Also if this is allowed, does it actually make logical and financial sense to do this? Or are people better off just using the LISA and closing down the HTB ISA after their transfer?

I could use a TSB reg saver which has easy access but that's got 2% interest, which is smaller than my HTB ISA. Other reg savers with larger interest have no easy access to the funds which might mean that I am not sure how to execute the timing and mechanics (not a cashflow / emergency fund problem) of the transfer to the LISA.

Thanks!
Goals
Save £12k in 2017 #016 (£4212.06 / £10k) (42.12%)
Save £12k in 2016 #041 (£4558.28 / £6k) (75.97%)
Save £12k in 2014 #192 (£4115.62 / £5k) (82.3%)

Comments

  • eskbanker
    eskbanker Posts: 30,925 Forumite
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    TrustyOven wrote: »
    Can I then continue to use the HTB ISA as a regular saver, 200 per month, and transfer the balance in mid-March 2019 into the LISA (with the remainder of 4000 - (12 * 200) being deposited into the LISA in early tax year starting 2018)?

    And continue to do that for as long as I need in order to build a deposit?

    Or can transfers from HTB ISA to LISA only happen in this tax year and cannot be done after start of tax year 2018? (not sure the literature i've seen so far is explicit in this)
    Clause 9B.17 of the official rules is clear that HTB to LISA transfers are allowed after the current tax year but that they count towards the £4K annual LISA allowance:
    9B.17 Funds transferred in this way will be qualifying additions to a Lifetime ISA and eligible for a 25% government bonus.

    Any funds transferred from a Help to Buy: ISA to a Lifetime ISA that are:
    • In excess of the amount held in the Help to Buy: ISA as at 5 April 2017,
    • Transferred from a Help to Buy: ISA after the single transfer described above has taken place, or
    • Transferred in 2018/19 or subsequent years
    will be current year payments which will count towards the annual Lifetime ISA payment limit.
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