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  • FIRST POST
    • MSE Helen Saxon
    • By MSE Helen Saxon 16th Mar 16, 5:06 PM
    • 75Posts
    • 42Thanks
    MSE Helen Saxon
    Lifetime ISAs guide
    • #1
    • 16th Mar 16, 5:06 PM
    Lifetime ISAs guide 16th Mar 16 at 5:06 PM
    Hi!

    This is the discussion thread for the



    Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.


    Thanks folks,
Page 39
    • NevvyC
    • By NevvyC 19th Jun 17, 10:25 AM
    • 37 Posts
    • 1 Thanks
    NevvyC
    When HMRC run their compliance programme after the end of the tax year and discover invalid ISAs, after confirming their discovery with you, they will issue a discovery notice to the ISA provider. This will inform them to treat the invalid subscriptions as if they weren't in an ISA. This means any income or growth from them will be taxable. Lifetime ISA bonuses will also be repaid to HMRC.

    HMRC can "repair" invalid subscriptions that are within the annual allowance by instructing the ISA manager of a date from which the invalid subscriptions can restart having an ISA tax exemption.

    Where over the annual allowance HMRC will instruct the ISA provider to remove subscriptions that are over the £20k/£4k allowance.


    However, when you transfer current year subscriptions in an ISA, those subscriptions are treated as having been made with the new ISA manager, and never with the original ISA manager. Indeed, if the old ISA is fully transferred to another ISA manager it will not be included in the end of year reporting to HMRC and so as far as HMRC are concerned you only hold the one ISA.
    Originally posted by isasmurf

    Great. Thanks for the insight...

    So to confirm, essentially there will be no negative repercussions if a current tax year LISA with subscriptions is transferred (and closed) to another current tax year LISA also with subscriptions...?

    As on paper it will just appear as £100 & £1 paid into the same LISA in May & June, respectively...

    Thanks
    • J2Khan
    • By J2Khan 19th Jun 17, 10:28 AM
    • 2 Posts
    • 0 Thanks
    J2Khan
    LISA - Cash / Stocks and Shares
    Hello

    I think ive read somewhere that one may opt for both a cash AND stocks and shares LISA

    Can anyone shed light on this please?

    Thanks
    JK
    • eskbanker
    • By eskbanker 19th Jun 17, 12:15 PM
    • 5,466 Posts
    • 5,270 Thanks
    eskbanker
    Hello

    I think ive read somewhere that one may opt for both a cash AND stocks and shares LISA

    Can anyone shed light on this please?

    Thanks
    JK
    Originally posted by J2Khan
    Anyone can read post #751 above, which confirms that one may not do this (in terms of paying new money into both in the same tax year), although in subsequent posts it's clarified that if you transfer one into the other before the end of the tax year then it's unlikely to be an issue if this is just a temporary situation....
    • chudleyette
    • By chudleyette 19th Jun 17, 3:21 PM
    • 60 Posts
    • 7 Thanks
    chudleyette
    LISA for remortgage?
    My partner is 37 and has never owned a home. He's just moved in with me (to the house I own with a mortgage) and I'm wondering whether if he gets a LISA he can use it for if we want to re-mortgage together?
    • eskbanker
    • By eskbanker 19th Jun 17, 3:33 PM
    • 5,466 Posts
    • 5,270 Thanks
    eskbanker
    This came up in another thread recently and the view was that a LISA wouldn't be applicable just for a simple straightforward remortgage, but only for a full property sale/purchase process (i.e. involving conveyancers/solicitors).
    • Owen1991
    • By Owen1991 19th Jun 17, 4:08 PM
    • 6 Posts
    • 1 Thanks
    Owen1991
    I recently sent the paper work off to transfer my Barclays H2B into my new Skipton ISA.

    The money has been transferred today but it's left my Barclays H2B ISA overdrawn.

    what should I do? Or will this get corrected automatically?
    • eskbanker
    • By eskbanker 19th Jun 17, 4:30 PM
    • 5,466 Posts
    • 5,270 Thanks
    eskbanker
    I recently sent the paper work off to transfer my Barclays H2B into my new Skipton ISA.

    The money has been transferred today but it's left my Barclays H2B ISA overdrawn.

    what should I do? Or will this get corrected automatically?
    Originally posted by Owen1991
    I suspect the transfer will have included accrued closing interest that won't have been credited to the account yet, does the amount involved suggest that? If this is the case, then it should self-correct....
    • Owen1991
    • By Owen1991 19th Jun 17, 4:41 PM
    • 6 Posts
    • 1 Thanks
    Owen1991
    I suspect the transfer will have included accrued closing interest that won't have been credited to the account yet, does the amount involved suggest that? If this is the case, then it should self-correct....
    Originally posted by eskbanker
    Ye it does, I presumed that what it was anyway, mainly wanted to know if it would self correct
    • Somerset La La La
    • By Somerset La La La 19th Jun 17, 6:44 PM
    • 388 Posts
    • 101 Thanks
    Somerset La La La
    I recently sent the paper work off to transfer my Barclays H2B into my new Skipton ISA.

    The money has been transferred today but it's left my Barclays H2B ISA overdrawn.

    what should I do? Or will this get corrected automatically?
    Originally posted by Owen1991
    Barclays being strange with closing interest. I had the same. It disappeared from my online banking the following day, but presume it will be corrected and the closing statement will be correct!

    Skipton H2B ISA Transfer from Barclays was completed today. Just waiting for Nutmeg now, which takes longer as it's S&S.

    Nutmeg dashboard shows a pending withdrawal of £0.00! I'm hoping they only transfer my LISA, which is what I've requested on the form and via PM - as I have an ordinary savings account open for £170 cashback. If they transfer that I'll lose the cashback
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    • NevvyC
    • By NevvyC 20th Jun 17, 10:37 AM
    • 37 Posts
    • 1 Thanks
    NevvyC
    Barclays being strange with closing interest. I had the same. It disappeared from my online banking the following day, but presume it will be corrected and the closing statement will be correct!

    Skipton H2B ISA Transfer from Barclays was completed today. Just waiting for Nutmeg now, which takes longer as it's S&S.

    Nutmeg dashboard shows a pending withdrawal of £0.00! I'm hoping they only transfer my LISA, which is what I've requested on the form and via PM - as I have an ordinary savings account open for £170 cashback. If they transfer that I'll lose the cashback
    Originally posted by Somerset La La La

    £170 cashback?! Is that a current/savings account incentive?! Not seen that one on MSE ... :/ and I keep a close eye on things !
    • Owen1991
    • By Owen1991 20th Jun 17, 11:11 AM
    • 6 Posts
    • 1 Thanks
    Owen1991
    All sorted, H2B ISA fully closed today, didn't need to do anything about going overdrawn from interest.
    • EnglishPhil
    • By EnglishPhil 21st Jun 17, 6:08 PM
    • 1 Posts
    • 0 Thanks
    EnglishPhil
    Apologies if this seems a daft question, but from what I understand £1 paid into a LISA today followed by £3999 in March will see a £1000 bonus payable (subject to the criteria etc.) on an average balance of around £2.50 for the whole year. Is that right?
    • eskbanker
    • By eskbanker 21st Jun 17, 8:07 PM
    • 5,466 Posts
    • 5,270 Thanks
    eskbanker
    Apologies if this seems a daft question, but from what I understand £1 paid into a LISA today followed by £3999 in March will see a £1000 bonus payable (subject to the criteria etc.) on an average balance of around £2.50 for the whole year. Is that right?
    Originally posted by EnglishPhil
    Yes, you could strictly pay in the £3,999 on 5 April 2018 and receive the £1,000 bonus later in the month (or maybe early May) - it's a bonus rather than interest and so isn't proportional to the length of time involved.

    Likewise, when bonuses are payable monthly from the 2018/19 tax year, the turnaround time from contribution to bonus will be very small even for those not trying to optimise it!
    • CrustyB
    • By CrustyB 22nd Jun 17, 11:02 AM
    • 1 Posts
    • 0 Thanks
    CrustyB
    I created a cash LISA a month ago and wanted to open a normal cash ISA (and transfer the funds from an old cash ISA into it) and was told by the people at charter savings bank that I can't put money into a cash LISA and a normal cash ISA in the same year, from what I've read that isn't correct but if that's what they're saying then what am I supposed to do?
    • darren72
    • By darren72 22nd Jun 17, 11:03 AM
    • 998 Posts
    • 200 Thanks
    darren72
    I created a cash LISA a month ago and wanted to open a normal cash ISA (and transfer the funds from an old cash ISA into it) and was told by the people at charter savings bank that I can't put money into a cash LISA and a normal cash ISA in the same year, from what I've read that isn't correct but if that's what they're saying then what am I supposed to do?
    Originally posted by CrustyB
    Yes, they are different products so you can put money into both.

    Just ignore them and go ahead regardless.
    • joehfax
    • By joehfax 22nd Jun 17, 4:52 PM
    • 2 Posts
    • 0 Thanks
    joehfax
    LISA Question
    Hi

    Both me and my girlfriend opened a LISA yesterday 21-06-2017, will we have to save the £4000 before april to maximise the Gov contributions or is is a year from the date opened i.e. 21-06-2018.

    Also I have read that from next year the contributions will be paid on a monthly basis rather that annually, would this mean that once my first year is up, would I be about to put the max for the year in £4000 in the first month of next year to receive the Gov's max contribution or is there going to be a monthly maximum as we are looking to buy next summer.

    Thanks

    Joe
    • eskbanker
    • By eskbanker 22nd Jun 17, 5:15 PM
    • 5,466 Posts
    • 5,270 Thanks
    eskbanker
    The allowances are aligned with tax years so you can each pay in up to £4K anytime between now and 5 April 2018 (bonus payable late April/early May 2018), and then another £4K anytime between 6 April 2018 and 5 April 2019 (bonus payable the following month).

    So, if you're buying next summer (must be after June 2018 as the accounts have to be open for at least a year) then you can pay in £16K between you and have that topped up to £20K, plus any interest or investment growth....
    • Big_Al2017
    • By Big_Al2017 22nd Jun 17, 6:21 PM
    • 1 Posts
    • 0 Thanks
    Big_Al2017
    Hi

    Hoping someone can help me and my partner with our questions as I've now confused myself?

    1. We both have a HTB LISA and opened a Share Center S&S LISA when they launched, can we open a Skipton Cash LISA and transfer our S&S LISA into it?
    2. How do i do this and close the S&S LISA down so i don't have 2 LISA's thus not qualifying for the bonus?
    3. We want to buy as soon as the first bonus is paid, i read that you need to have the LISA open for a year, is that with one provider or just in general as i want to transfer to a Cash LISA?
    3. I have over 4k in my HTB LISA, can i transfer it all into the Skipton Cash LISA and what's the latest i can do this to maximize the interest on received on the HTB account and be able to save 8k in my Cash LISA this year?

    Many thanks for your help.
    • Ed-1
    • By Ed-1 22nd Jun 17, 7:04 PM
    • 1,979 Posts
    • 1,057 Thanks
    Ed-1
    1. We both have a HTB ISA and opened a Share Center S&S LISA when they launched, can we open a Skipton Cash LISA and transfer our S&S LISA into it?
    Originally posted by Big_Al2017
    Yes - you can transfer a LISA into another LISA but all current year payments need to be transferred, like with any other ISA transfer.

    2. How do i do this and close the S&S LISA down so i don't have 2 LISA's thus not qualifying for the bonus?
    Originally posted by Big_Al2017
    You need to fill in Skipton's S&S ISA transfer form once you have your Skipton LISA opened.

    http://www.skipton.co.uk/~/media/skipton-co-uk/pdf/savings/stocks-and-shares-transfer-form.ashx?la=en-GB

    3. We want to buy as soon as the first bonus is paid, i read that you need to have the LISA open for a year, is that with one provider or just in general as i want to transfer to a Cash LISA?
    Originally posted by Big_Al2017
    Regulation 6(11) of the Schedule to these regulations
    http://www.legislation.gov.uk/uksi/2017/466/pdfs/uksi_20170466_en.pdf
    states that:

    (11) The account investor’s Lifetime ISA from which the withdrawal is made must have been open for at least 12 months after the date of the first payment into it and, for this purpose, a Lifetime ISA opened in the circumstances provided for in regulation 12B(5) is to be treated as being the same Lifetime ISA as the one from which the moneys transferred or paid into the account originated.

    4. I have over 4k in my HTB ISA, can i transfer it all into the Skipton Cash LISA and what's the latest i can do this to maximize the interest on received on the HTB account and be able to save 8k in my Cash LISA this year?
    Originally posted by Big_Al2017
    You can only pay £4,000 into your LISA by 5th April 2018.

    Anything you paid into your H2B ISA by 5th April 2017 does not count towards the LISA limit once transferred across to your LISA. Anything paid into the H2B ISA from 6th April 2017 does count towards the £4,000 LISA limit once transferred across. You can pay in another £4,000 from 6th April 2018.
    • CatGilmurray
    • By CatGilmurray 22nd Jun 17, 9:11 PM
    • 2 Posts
    • 0 Thanks
    CatGilmurray
    Lifetime Isa with low interest rate or Help to Buy?
    Obvious question but I can't find an answer and I'm in a quandry as to whether to save in a (cash) Lifetime Isa or Help to Buy.. There are reports that with the interest rate being so poor in a Lifetime Isa, despite the fact you can put bigger lump sums in than with a Help to Buy, you would still eventually lose out compared to the H2B with biggest ineterst rates. Is this true? I would have enough for a healthy deposit for my first home, so I'm not too bothered about not being able to use the H2B for that, and I'm looking a couple of years down the line, so I'm not bothered about the money being held in the Lifetime Isa for a year either. My problem is working out whether my money would be better off in a H2B where you can put less in, or a Lifetime Isa where you can save more but have a very low interest rate. I have a poorly paid job, but savings, some of which are in accounts that have good interest rates, up to a limit, and I want to save the rest in one of theses. Can anyone advise me??
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