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  • FIRST POST
    • surfer9
    • By surfer9 10th Mar 17, 4:41 PM
    • 88Posts
    • 16Thanks
    surfer9
    Lifetime ISA
    • #1
    • 10th Mar 17, 4:41 PM
    Lifetime ISA 10th Mar 17 at 4:41 PM
    Transferring the Help To Buy ISA to the Lifetime ISA:
    As far as I understand you can transfer the money across in the 1st year and it doesn't count towards the 4000. So you still get the 25% bonus on whatever amount your Help To Buy ISA got up to, plus you can add 4000 and get the 25% on that also. Correct?


    The Bonus
    Does this physically show up in your account every year/month? or does it only magically appear when you buy a house/turn 60? I assume you can't invest the 1000 bonus into the Stocks and Shares LISA?


    Interest:
    I assume some interest is paid on these ISA's?
    Can you withdraw the interest or does that have to stay within the ISA also?
    Do you earn interest on the bonus?
Page 1
    • xylophone
    • By xylophone 10th Mar 17, 4:50 PM
    • 21,337 Posts
    • 12,257 Thanks
    xylophone
    • #2
    • 10th Mar 17, 4:50 PM
    • #2
    • 10th Mar 17, 4:50 PM
    http://blog.moneysavingexpert.com/2016/07/25/24984/
    • masonic
    • By masonic 10th Mar 17, 5:40 PM
    • 9,126 Posts
    • 6,270 Thanks
    masonic
    • #3
    • 10th Mar 17, 5:40 PM
    • #3
    • 10th Mar 17, 5:40 PM
    As above, although it should be added that from the 2018/19 tax year the bonus will be paid monthly according to current (not finalised) rules.
    • surfer9
    • By surfer9 19th Mar 17, 2:39 PM
    • 88 Posts
    • 16 Thanks
    surfer9
    • #4
    • 19th Mar 17, 2:39 PM
    • #4
    • 19th Mar 17, 2:39 PM
    Although that article answers some of my questions, I am unable to find any information about the bonus and exactly what happens when you get it, especially in terms of a Stocks and Shares LISA.

    Does anyone know....

    1. If this bonus physically appears within your account. ie. After year 1 will the 4000 literally be topped up to 5000.

    2. I will assume that the 1000 bonus does not count towards your annual ISA limit. Is this assumption correct?

    3. Can I physically use that 1000 bonus to invest within the Stocks and Shares ISA? I'd assume not as it's supposed to be for a property and not to potentially be lost in stocks?

    Thanks.
    • masonic
    • By masonic 19th Mar 17, 2:45 PM
    • 9,126 Posts
    • 6,270 Thanks
    masonic
    • #5
    • 19th Mar 17, 2:45 PM
    • #5
    • 19th Mar 17, 2:45 PM
    1. If this bonus physically appears within your account. ie. After year 1 will the 4000 literally be topped up to 5000.
    Originally posted by surfer9
    Yes, and the top up will be on a monthly basis from the start of the 2018/19 tax year.

    2. I will assume that the 1000 bonus does not count towards your annual ISA limit. Is this assumption correct?
    Yes.

    3. Can I physically use that 1000 bonus to invest within the Stocks and Shares ISA? I'd assume not as it's supposed to be for a property and not to potentially be lost in stocks?
    Why would you assume the bonus is supposed to be for a property? It is for retirement, but can also be used towards a property. It can be invested just like the money you yourself pay in.
    • norm_
    • By norm_ 19th Mar 17, 3:02 PM
    • 145 Posts
    • 87 Thanks
    norm_
    • #6
    • 19th Mar 17, 3:02 PM
    • #6
    • 19th Mar 17, 3:02 PM
    If you buy a house with the LISA does the account close? Or can you continue to use it or open a new one to save for retirement?
    • masonic
    • By masonic 19th Mar 17, 4:29 PM
    • 9,126 Posts
    • 6,270 Thanks
    masonic
    • #7
    • 19th Mar 17, 4:29 PM
    • #7
    • 19th Mar 17, 4:29 PM
    If you buy a house with the LISA does the account close? Or can you continue to use it or open a new one to save for retirement?
    Originally posted by norm_
    You can leave the account open and continue to use it.
    • bowlhead99
    • By bowlhead99 19th Mar 17, 4:38 PM
    • 6,337 Posts
    • 11,195 Thanks
    bowlhead99
    • #8
    • 19th Mar 17, 4:38 PM
    • #8
    • 19th Mar 17, 4:38 PM
    If you buy a house with the LISA does the account close? Or can you continue to use it or open a new one to save for retirement?
    Originally posted by norm_
    If you withdraw every penny of cash you may find the provider closes your account, depending on their terms and conditions and what they say they will do with dormant accounts. So if you didn't want the account to close, you could leave some money in the account. Although none have published their detailed terms and conditions because LISAs do not exist yet.

    It is very likely you would want to use a LISA with a different provider for the goal of building a house deposit with cash deposits over a few years, compared to the one you use for the goal of retirement age 60. For the former you would generally use a savings provider like a bank or building society, for the latter an investment firm that allowed you to buy investment funds with the objective of long-term growth.

    So if you have a few pounds left in your LISA after buying the house you would probably transfer it to a different one. If you are still under 40 when buying the house it wouldn't matter if you closed it, because you can still open a new one. If you were over 40 you would want to make sure that you did not close down your LISA if you want to carry on depositing into it.
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