Help to Buy ISA guide

misseve · 5 October 2016 at 4:11PM

Hi,

Any advice appreciated,

I have £6250 in a cash ISA I opened in 2014, which I put £250 a month in, so I have deposited this tax year. I now want to open a HTB ISA, so I went into Nationwide to enquire about the ISA split. They didn't seem to know what they were talking about and said I would have to wait until April 2017 to open a HTB ISA due to my existing cash ISA with Halifax.

Would I be better off closing my cash ISA, opening a HTB ISA and then putting the remaining money from my existing ISA in a normal savings account with a higher interest rate? And would I be allowed to do this?

Thanks in advance.

Ed-1 · 5 October 2016 at 4:27PM

misseve wrote: »

Hi,

Any advice appreciated,

I have £6250 in a cash ISA I opened in 2014, which I put £250 a month in, so I have deposited this tax year. I now want to open a HTB ISA, so I went into Nationwide to enquire about the ISA split. They didn't seem to know what they were talking about and said I would have to wait until April 2017 to open a HTB ISA due to my existing cash ISA with Halifax.

Would I be better off closing my cash ISA, opening a HTB ISA and then putting the remaining money from my existing ISA in a normal savings account with a higher interest rate? And would I be allowed to do this?

Thanks in advance.

A help to buy ISA is a cash ISA. You are only allowed to pay into one cash ISA in a tax year. Nationwide count all cash ISAs held with them as a single cash ISA which is where the 'split' ISA thing comes in. You need to keep all current year ISA subscriptions together so you could transfer your current year subscriptions in your Halifax cash ISA to a Nationwide cash ISA then open a Nationwide help to buy ISA and pay into that. Or you could close your Halifax cash ISA completely (you can do this only once in a tax year) and then open any help to buy ISA and pay into that, moving excess funds to high-interest current accounts such as TSB classic plus and Club Lloyds (read up about how to service these accounts on a monthly basis). Note if you do the latter you can't pay into another cash ISA while you pay into a help to buy ISA unless the provider allows split ISA contributions. But as cash ISA rates are so low anyway this doesn't matter.

misseve · 6 October 2016 at 11:57AM

Thank you, so much more helpful than the staff at Nationwide.

robert_wynne_jones · 6 October 2016 at 2:08PM

Myself and my girlfriend are 3/4 of the way through buying our first house. We both have the help to buy isa's and both have £2800 in each (we've been drip feeding it for several months!).

So 25% of that would give us £700 each and £1400 in total.

Our solicitor has been very sketchy on the details and not much help at all.

What is the process exactly to claiming it all? There's £5600 in savings in total there, will that go towards the deposit along with the 25%? (Making £7000 total) How much of a cut will the solicitor take out of that for themselves? I'd imagine it's a fair chunk knowing them!! (We've already paid their fees)

Any help much appreciated.

Super_Swifty · 6 October 2016 at 5:00PM

Hi guys,

I've been searching for an answer to this on MSE's site, the govt. site and the forum but not managed to find it (I have seen it asked twice in this thread but not answered yet). I only skimmed the first 10 pages of this not all 60 so apologies if it has been asked already.

I'm wanting clarification on what the £250k limit covers. The government website states "a purchase price of up to £250k" but what does this mean exactly?

Is this just the price agreed on the house? Does it have to include stamp duty or other non-direct fees?

I'm looking at a few new builds on the market at £262-264k. If I manage to negotiate the price down to £250k would I then be able to use the bonus from the H2B ISA account that I've been paying in to? Even if the stamp duty, fees etc bump the "cost" back over £250k?

I'm not sure whether it's relevant to my question but we will be looking to use the H2B equity loan in conjunction with the H2B ISA, which I've read is perfectly fine, but I don't know if these circumstances change my query.

Many thanks.

eskbanker · 6 October 2016 at 7:42PM

Super_Swifty wrote: »

I'm wanting clarification on what the £250k limit covers. The government website states "a purchase price of up to £250k" but what does this mean exactly?

Is this just the price agreed on the house? Does it have to include stamp duty or other non-direct fees?

I'm looking at a few new builds on the market at £262-264k. If I manage to negotiate the price down to £250k would I then be able to use the bonus from the H2B ISA account that I've been paying in to? Even if the stamp duty, fees etc bump the "cost" back over £250k?

It's the actual price of the property itself, not stamp duty or fees, see https://www.helptobuy.gov.uk/documents/2015/12/scheme-rules.pdf:

“Purchase Price” means:

(a) in connection with the acquisition of any interest in land other than under the terms of a Regulated Home Purchase Plan, the value of the consideration required to be paid, and which is paid, by the purchaser under the sale and purchase agreement entered into in connection with the acquisition of that interest in land (excluding, for the avoidance of doubt, any consideration attributed to the purchase of any fixtures and/or fittings); and

(b) in connection with the acquisition of any interest in land under the terms of a Regulated Home Purchase Plan, the value of the consideration required to be paid, and which is paid, to the original seller for the legal interest in that land (excluding, for the avoidance of doubt, any consideration attributed to the purchase of any fixtures and/or fittings).

Super_Swifty · 7 October 2016 at 9:04AM

Thank you for your help

masseyattack · 10 October 2016 at 10:56AM

I discovered an annoying wrinkle with these ISA's today.

I've just been given my completion date on a new build which is less than two weeks away. The conveyancer now says, close our Help to Buy ISAs, and send closure statements to them at least a week before completion. But NatWest send out the completion form 5-7 business days after closure. It's going to be tight!

vernall · 25 October 2016 at 8:43PM

Help with Nationwide HTB and Easy Access ISA

Hi guys

Could someone please clarify a few things for me please.

I have no previous years ISAs anywhere
I have just in the last week opened a normal ISA with another provider but I have not paid anything into it(balance is 0)
This ISA was opened to pop in the remains of the Santander 123 balance once the rate drops next week and I have filled up 3 Bank of Scotlands and a Tesco Account,so literally would be talking about £2000.
I have exhausted all other avenues for maxing accounts,i.e. TSB,Nationwide,BoS etc.
I am eligable to open a H2B ISA as never owned a property before anyone asks.

How would I go about opening a Nationwide H2B ISA now I have opened the other one last week?........Am I right in saying I can just open it as the other one does not count as I have paid nothing into it?
Also I will be able to put a fair bit more by than the £200 per month H2B allows so would like to open a Nationwide Easy Access ISA too to put any excess spare cash in........Would I open this at the same time as the H2B ISA via online banking?or is there something or some box I need to tick in the application?
and just one more thing(as Columbo said) does whatever I deposit into the H2B ISA come off my yearly allowance in the normal ISA?

Thanks

Ed-1 · 25 October 2016 at 9:14PM

vernall wrote: »

Help with Nationwide HTB and Easy Access ISA

Hi guys

Could someone please clarify a few things for me please.

I have no previous years ISAs anywhere
I have just in the last week opened a normal ISA with another provider but I have not paid anything into it(balance is 0)
This ISA was opened to pop in the remains of the Santander 123 balance once the rate drops next week and I have filled up 3 Bank of Scotlands and a Tesco Account,so literally would be talking about £2000.
I have exhausted all other avenues for maxing accounts,i.e. TSB,Nationwide,BoS etc.
I am eligable to open a H2B ISA as never owned a property before anyone asks.

How would I go about opening a Nationwide H2B ISA now I have opened the other one last week?........Am I right in saying I can just open it as the other one does not count as I have paid nothing into it?
Also I will be able to put a fair bit more by than the £200 per month H2B allows so would like to open a Nationwide Easy Access ISA too to put any excess spare cash in........Would I open this at the same time as the H2B ISA via online banking?or is there something or some box I need to tick in the application?
and just one more thing(as Columbo said) does whatever I deposit into the H2B ISA come off my yearly allowance in the normal ISA?

Thanks

A Help to Buy ISA is a cash ISA so the usual ISA allowance of £15,240 applies with the additional account restriction of a max £200 per month deposit (£1,200 in month 1). What provider is the cash ISA you just opened with? You ordinarily can't pay new money into 2 cash ISAs in the same tax year so if you want to do this you will need to use a split ISA provider such as Nationwide that treats all cash ISAs held with them as one overall cash ISA.

Whether you should be paying into a cash ISA is a different matter. Definitely use a Help to Buy ISA, but can't you find anywhere else to put the rest rather than a cash ISA (I admit it's getting bleaker).

And yes, if you've not paid into the cash ISA you've just opened, you can leave it empty or close it.

Help to Buy ISA guide

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free