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    • markjames
    • By markjames 10th Mar 17, 10:53 PM
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    markjames
    Junior ISA to Help to Buy ISA
    • #1
    • 10th Mar 17, 10:53 PM
    Junior ISA to Help to Buy ISA 10th Mar 17 at 10:53 PM
    My daughter paid 4080 into her existing junior ISA this tax year, she did not open any new ISAs this tax year. She closed the ISA in January on her 18th birthday and moved the money into a non ISA savings account. Is she allowed to open a help to buy ISA before the new tax year. The plan is to pay 1200 in now and two further monthly payments of 200 before transferring to a new LISA, thus getting 25% bonus on the 1600. I have searched everywhere but cannot find an answer to this question.
Page 1
    • xylophone
    • By xylophone 10th Mar 17, 11:17 PM
    • 20,552 Posts
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    xylophone
    • #2
    • 10th Mar 17, 11:17 PM
    • #2
    • 10th Mar 17, 11:17 PM
    https://www.helptobuy.gov.uk/help-to-buy-isa/who-is-eligible/

    http://blog.moneysavingexpert.com/2016/07/25/24984/
    • markjames
    • By markjames 10th Mar 17, 11:53 PM
    • 4 Posts
    • 1 Thanks
    markjames
    • #3
    • 10th Mar 17, 11:53 PM
    • #3
    • 10th Mar 17, 11:53 PM
    I still find it ambiguous.
    She hasn't opened a new ISA this tax year, she has paid in to one but she no longer has an active one.
    On one hand the govt advice is she can open a help to buy and on the other it appears she can't.
    • masonic
    • By masonic 11th Mar 17, 7:26 AM
    • 8,775 Posts
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    masonic
    • #4
    • 11th Mar 17, 7:26 AM
    • #4
    • 11th Mar 17, 7:26 AM
    I still find it ambiguous.
    She hasn't opened a new ISA this tax year, she has paid in to one but she no longer has an active one.
    On one hand the govt advice is she can open a help to buy and on the other it appears she can't.
    Originally posted by markjames
    She is allowed to pay new money into a cash JISA and adult cash ISA (i.e. HTB ISA) in the same tax year. Since she is well below the overall subscription limit, there is no issue there.

    But she cannot pay more than £1400 into the HTB ISA this tax year. There is no point continuing to fund the HTB ISA beyond that if transferring into a LISA, since any subscriptions in the next tax year will need to be deducted from the £4000 LISA allowance in that year. She may as well pay that money directly into the LISA.
    • markjames
    • By markjames 11th Mar 17, 7:55 AM
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    markjames
    • #5
    • 11th Mar 17, 7:55 AM
    • #5
    • 11th Mar 17, 7:55 AM
    That's great thank you. But am I not right to think she needs to move into the Lisa after contributing 1600 to the help to buy so to get the 25% bonus as 1600 is the minimum for a bonus.
    • masonic
    • By masonic 11th Mar 17, 8:05 AM
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    masonic
    • #6
    • 11th Mar 17, 8:05 AM
    • #6
    • 11th Mar 17, 8:05 AM
    That's great thank you. But am I not right to think she needs to move into the Lisa after contributing 1600 to the help to buy so to get the 25% bonus as 1600 is the minimum for a bonus.
    Originally posted by markjames
    No, that seems to be a common misconception. The £1,600 limit relates to claiming the bonus when buying a house, not when transferring into a LISA.
    • markjames
    • By markjames 11th Mar 17, 9:48 AM
    • 4 Posts
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    markjames
    • #7
    • 11th Mar 17, 9:48 AM
    • #7
    • 11th Mar 17, 9:48 AM
    No, that seems to be a common misconception. The £1,600 limit relates to claiming the bonus when buying a house, not when transferring into a LISA.
    Martin's Blog suggests my daughter doing this:

    Rule no. 3 – Unlikely to!buy before April 2018? Go for Help to Buy ISA now AND LISA. To maximise your gain on this…
    – Open a top Help to Buy ISA now and save the max in it.
    – In April 2017, if you can save more, also open a LISA and put as much as you can in up to £1,600 (the LISA limit minus £2,400, a year’s maximum Help to Buy contributions). Yet only do this if you’re sure you will buy a home!at some point, if not follow rule 4.
    – In March 2018 (ie, just before the tax year ends) transfer the Help to Buy ISA into the LISA. Don’t do this earlier as then you miss out on being able to put all your contributions into a Help to Buy ISA.

    So the plan is:

    £1200 into a Help to Buy today
    £200 early April (before 6th)
    then £200 a month for 12 months
    April 6th 2017 open a LISA with £1600 the maximum allowed as £2400 will be paid into the HTB
    Before April 6th 2018 transfer HTB into LISA
    Doesn't that mean my daughter will have 25% bonus on £5400 when she buys a house?

    This gives her £1350 bonus by April 2018 instead of £1000 if she doesn't open a help to buy now.
    • masonic
    • By masonic 11th Mar 17, 10:25 AM
    • 8,775 Posts
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    masonic
    • #8
    • 11th Mar 17, 10:25 AM
    • #8
    • 11th Mar 17, 10:25 AM
    Yes, but there is no difference in outcome between paying £200 per month into the HTB ISA and £1600 into the LISA vs. leaving the HTB ISA at £1400 and paying £4000 into the LISA. You can make that choice based on where you can get the best return on the money (the answer will probably be outside of the ISA, for example in a 5% regular savings account - in which case, paying £4000 into the LISA at the end of the next tax year would be best).
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