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  • FIRST POST
    • MSE Eesha
    • By MSE Eesha 25th Jul 16, 2:53 PM
    • 87Posts
    • 21Thanks
    MSE Eesha
    First-time buyers trick: Max LISA and Help to Buy ISA gains by timing it right
    • #1
    • 25th Jul 16, 2:53 PM
    First-time buyers trick: Max LISA and Help to Buy ISA gains by timing it right 25th Jul 16 at 2:53 PM
    This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.





    Please click 'post reply' to discuss below.
Page 2
    • BobbyBob
    • By BobbyBob 15th Mar 17, 5:06 PM
    • 1 Posts
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    BobbyBob
    Hi,

    I'm a little confused to Martin's advice (particularly rule number 3).

    1) I thought that you could only transfer money that was saved in a HTB before April 2017 to a LISA and it not impact your LISA allowance for the April 2017 - April 2018 year?

    2) If you have a LISA and a HTB and you transfer your HTB savings from before April 2017 into the LISA on 6th April 2017, do you still get the full allowances for both savings accounts for that year? For example you can still save £200 per month in HTB in the April 2017 - April 2018 year, plus you can save the full £4000 (plus the money transfered from HTB in previous year) in your LISA in the April 2017 - April 2018 year? This is what I would do. I'm aware that I can only use the 25% bonus on one of the accounts.

    Thank you
    Last edited by BobbyBob; 15-03-2017 at 5:09 PM.
    • Ed-1
    • By Ed-1 15th Mar 17, 5:35 PM
    • 1,980 Posts
    • 1,059 Thanks
    Ed-1
    Hi,

    I'm a little confused to Martin's advice (particularly rule number 3).

    1) I thought that you could only transfer money that was saved in a HTB before April 2017 to a LISA and it not impact your LISA allowance for the April 2017 - April 2018 year?

    2) If you have a LISA and a HTB and you transfer your HTB savings from before April 2017 into the LISA on 6th April 2017, do you still get the full allowances for both savings accounts for that year? For example you can still save £200 per month in HTB in the April 2017 - April 2018 year, plus you can save the full £4000 (plus the money transfered from HTB in previous year) in your LISA in the April 2017 - April 2018 year? This is what I would do. I'm aware that I can only use the 25% bonus on one of the accounts.

    Thank you
    Originally posted by BobbyBob
    You understand both correctly. What is your issue with point 1?
    • HEROWHENZERO
    • By HEROWHENZERO 21st Mar 17, 7:52 PM
    • 81 Posts
    • 154 Thanks
    HEROWHENZERO
    I had a house back in 2004 for a year, lost the house when i split up with the ex and have been renting ever since. Am I still classed as a home owner in the eyes of using a LISA so save for a house? Effectively I see myself as a first time buyer again, as I have no house at all in my name. Secondly, my wife is a true first time buyer, therefore if she was to open a LISA and save, would we be able to use that money to buy a house together in the future as "first-time buyers".
    Just for today I will not try to solve all my life problems at once. | DFD: April 2033 April 2029
    Original Debt: £96K Mar 2016 | Current Debt: £84281.73
    Sept 2017
    • WillPS
    • By WillPS 22nd Mar 17, 10:48 PM
    • 201 Posts
    • 90 Thanks
    WillPS
    I had a house back in 2004 for a year, lost the house when i split up with the ex and have been renting ever since. Am I still classed as a home owner in the eyes of using a LISA so save for a house? Effectively I see myself as a first time buyer again, as I have no house at all in my name. Secondly, my wife is a true first time buyer, therefore if she was to open a LISA and save, would we be able to use that money to buy a house together in the future as "first-time buyers".
    Originally posted by HEROWHENZERO
    If you've ever owned a house, you're out of luck.

    My friend "inherited" his grandfather's house when he was a teenager - in actual fact his Dad had arranged it all that way as some sort of tax or bankruptcy fiddle, and he didn't particularly benefit from it; but he had technically briefly owned a house and so couldn't benefit from the Help to Buy ISA.

    I understand the rules are the same.
    • fawcett17
    • By fawcett17 30th Mar 17, 10:03 AM
    • 2 Posts
    • 0 Thanks
    fawcett17
    LISA Bonus
    Hi,

    My current situation is that I have been saving into a H2B ISA for the past year and have accumulated £3,600 (£1,200 initial payment + £2,400 in monthly contributions).

    I am looking to open a LISA in the 2017/18 tax year and I am unsure about how the government bonus is calculated when I transfer the H2B to the LISA. From reading this article I understand that I should transfer £1,600 in April 2017 and then continue contributing £2,400 into the H2B. I would then have £6,000 in H2B by March 2018 (£2,400 + £3,600), am I correct in my saying that the 25% bonus from the H2B would be paid into my LISA when I transfer? e.g £6,000*1.25=£7,500 to transfer over.

    My next question is... if you add the £7,500 to the £1,600 in the LISA by March 2018. What would the 25% LISA government bonus be at the end of the 2017/2018 tax year? i.e would it be 25% on £9,100 balance in the LISA by March 2018 or would it be 25% on just the £4,000 LISA limit for that tax year?

    Thanks in advance,
    • QWERTYSTAR
    • By QWERTYSTAR 30th Mar 17, 2:53 PM
    • 1 Posts
    • 0 Thanks
    QWERTYSTAR
    For new builds or any property
    I just wanted to know if the LISA can be used for any property or are you restricted to buying a new build?
    • Ed-1
    • By Ed-1 30th Mar 17, 6:43 PM
    • 1,980 Posts
    • 1,059 Thanks
    Ed-1
    Hi,

    My current situation is that I have been saving into a H2B ISA for the past year and have accumulated £3,600 (£1,200 initial payment + £2,400 in monthly contributions).

    I am looking to open a LISA in the 2017/18 tax year and I am unsure about how the government bonus is calculated when I transfer the H2B to the LISA. From reading this article I understand that I should transfer £1,600 in April 2017 and then continue contributing £2,400 into the H2B. I would then have £6,000 in H2B by March 2018 (£2,400 + £3,600), am I correct in my saying that the 25% bonus from the H2B would be paid into my LISA when I transfer? e.g £6,000*1.25=£7,500 to transfer over.

    My next question is... if you add the £7,500 to the £1,600 in the LISA by March 2018. What would the 25% LISA government bonus be at the end of the 2017/2018 tax year? i.e would it be 25% on £9,100 balance in the LISA by March 2018 or would it be 25% on just the £4,000 LISA limit for that tax year?

    Thanks in advance,
    Originally posted by fawcett17
    If you transfer the money out of the Help to Buy ISA, you don't get the Help to Buy bonus unless you close that account and follow the procedures to claim the bonus to buy a first-time house at that point.

    However, by transferring it into a LISA, you will get the LISA bonus as normal when it is paid, the same as it is paid on all LISA contributions.

    So your LISA balance will consist of the £6000 transferred over from the Help to Buy ISA, plus interest, plus the £1,600 of contributions straight into the LISA. Therefore in April 2018, you'd receive a 25% bonus on the £7,600 balance, i.e. £1,900.
    • fawcett17
    • By fawcett17 1st Apr 17, 7:18 PM
    • 2 Posts
    • 0 Thanks
    fawcett17
    Hi Ed,

    Thank you for your response, I still don't understand what the benefit of transferring your H2B balance to your LISA in March-2018 as oppose to doing it straight away in April-2017?

    Could you explain the benefit?

    Thanks,
    Matt
    • Ed-1
    • By Ed-1 1st Apr 17, 10:14 PM
    • 1,980 Posts
    • 1,059 Thanks
    Ed-1
    Hi Ed,

    Thank you for your response, I still don't understand what the benefit of transferring your H2B balance to your LISA in March-2018 as oppose to doing it straight away in April-2017?

    Could you explain the benefit?

    Thanks,
    Matt
    Originally posted by fawcett17
    There isn't a benefit other than the fact the H2B ISA interest rate is likely to be higher than the LISA so by leaving the money in the H2B ISA longer, you're getting more interest, plus the H2B ISA can be used before April 2018 to buy a house. Other than those, no reason not to transfer sooner as long as you can find a LISA to transfer to!
    • kopite32
    • By kopite32 2nd Apr 17, 9:48 PM
    • 4 Posts
    • 0 Thanks
    kopite32
    My plan is to keep feeding my high interest Help to Buy ISA throughout 17/18 and then transfer the part of the Help to Buy ISA built up before 17/18 into LISA in March 2018 deposit an extra £4k into LISA, and then continue feeding both my H2B ISA and LISA from 18/19 onwards.This i what i want to do but is this possible? I thought you had to transfer and close the help to buy isa in the 2017/18 tax year to get the £1100 bonus from help to buy isa as il have the max £4400 in now. Or is just transferring the whole lot to a lifetime isa in march 2018 a better option? ? Please help
    Last edited by kopite32; 02-04-2017 at 9:57 PM. Reason: More info
    • Ed-1
    • By Ed-1 3rd Apr 17, 12:29 AM
    • 1,980 Posts
    • 1,059 Thanks
    Ed-1
    My plan is to keep feeding my high interest Help to Buy ISA throughout 17/18 and then transfer the part of the Help to Buy ISA built up before 17/18 into LISA in March 2018 deposit an extra £4k into LISA, and then continue feeding both my H2B ISA and LISA from 18/19 onwards.This i what i want to do but is this possible? I thought you had to transfer and close the help to buy isa in the 2017/18 tax year to get the £1100 bonus from help to buy isa as il have the max £4400 in now. Or is just transferring the whole lot to a lifetime isa in march 2018 a better option? ? Please help
    Originally posted by kopite32
    You only have to close the H2B ISA to get the H2B ISA bonus. If you transfer some to LISA you'll get the LISA bonus instead.

    There's nothing to say you have to close the H2B ISA to get the LISA bonus. You can have both open together.
    • kopite32
    • By kopite32 3rd Apr 17, 11:52 PM
    • 4 Posts
    • 0 Thanks
    kopite32
    So would it not be better to transfer and close the help to buy isa then that way you would get the help to buy bonus and the lisa bonus come april 2018?? Whats the advantage of keeping both open? Even tho i would like to keep both open i would be losing out on £1100 help to buy bonus for not closing this account?

    I read this on another site
    Greater potential bonus
    With both the Help to Buy ISA and Lifetime ISA, the government adds 25% to your savings. At up to a £1,000 a year you could receive a greater bonus from a Lifetime ISA in just 13 months than a Help to Buy ISA.
    This is how it works:
    £4,400 plus interest (max possible) transferred from H2B ISA in 2017/18 tax year – at least £1,100 bonus paid after 6 April 2018
    £4,000 contribution to LISA on 6 April 2017 - £1,000 bonus paid after 6 April 2018
    £4,000 contribution to LISA on 6 April 2018 - £1,000 bonus paid May 2018
    Total bonus £3,100 paid no later than May 2018.

    So can you just transfer £4400 from your help to buy isa and keep it open and still get the help to buy isa bonus or does the help to buy isa have to be closed to get both bonuses in april 2018? This is what is confusing me?
    Last edited by kopite32; 04-04-2017 at 12:03 AM. Reason: Spelling mistake
    • kopite32
    • By kopite32 6th Apr 17, 4:46 PM
    • 4 Posts
    • 0 Thanks
    kopite32
    So do i have to transfer and close my help to buy isa with £4400 in it upto the 2016/17 tax year or can i just transfer the £4400 and keep the account open to get the £1100 bonus?
    • AMcLean
    • By AMcLean 21st Aug 17, 11:20 AM
    • 1 Posts
    • 0 Thanks
    AMcLean
    Hi can anyone help me out with some advice please, I am 23 and don't have either a LISA or HTB ISA I don't have any plans on buying a property in the next couple of years so I was going to open a Skipton LISA and put £4,000 in the account by April to get the £1,000 bonus, and keep putting £4,000 away each year after that. I work full-time and still live at home so I would be able to put more money away into another account, should I also open a HTB ISA or should I just get a Cash ISA ? When eventually going to buy my first property could I combine a HTB ISA and a LISA ? Sorry if that's a stupid question, just trying to figure out how to best maximise my savings from now until I decide to leave home. Cheers, Adam.
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