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Does LISA consumption restore ISA allowance?
intalex
Posts: 1,138 Forumite
Can't seem to find much on this subject, but was wondering if say one uses (=withdraws) their accumulated LISA funds of ~12k for their 1st property purchase in May/June 2018 after saving ~£4k per year year over 3 years (1 H2B + 2 LISA), would that then "restore" a ~12k (or ~15k inc. bonus) ISA allowance under the new flexible ISA rules?
Of course the funds cannot be put back into the same LISA, but can they be put into another cash ISA with the same provider?
I'm specifically looking at a Skipton LISA / Cash ISA combination.
Thanks in advance
Of course the funds cannot be put back into the same LISA, but can they be put into another cash ISA with the same provider?
I'm specifically looking at a Skipton LISA / Cash ISA combination.
Thanks in advance
0
Comments
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Flexible ISA rules only apply to paying withdrawn money back into the same flexible ISA that it was withdrawn from, so the short answer is no.
However, given that there's an annual ISA allowance of £20K anyway, your question would generally be irrelevant, in that you could pay £20K into any ISA in 2018/19 (or £16K if £4K has already been paid into the LISA) and it would be quite unusual for someone buying their first property to have more than £16K of spare money sloshing around when doing so! And even if they did, there are generally better options than cash ISAs anyway....0 -
Fair enough, if the Flexible ISA rules state "same account" rather than "same provider", then it wouldn't work.
The likelihood of being able to take advantage even if it did work would not be so unlikely, as technically there'd be plenty of time (until 5th April 2019) to use any "restored" allowance if the LISA funds are used in May/June 2018.0 -
Yes, there'd be plenty of time but my point was that it would be unusual for there to be plenty of money, in the context of the amount of financial stretching most first-time buyers have to do. Are you seriously anticipating having more than £16K to put into savings in the months following a first-time property purchase and if so, do you believe that a cash ISA would be the best place for that?Fair enough, if the Flexible ISA rules state "same account" rather than "same provider", then it wouldn't work.
The likelihood of being able to take advantage even if it did work would not be so unlikely, as technically there'd be plenty of time (until 5th April 2019) to use any "restored" allowance if the LISA funds are used in May/June 2018.0 -
Let's just say it's not impossible for some people, and yes, some people still value the tax free wrapper for the long term.Are you seriously anticipating having more than £16K to put into savings in the months following a first-time property purchase and if so, do you believe that a cash ISA would be the best place for that?0
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