ISA and Help to Buy Query

Blankcanvas

Hi,

I'm interested in investing in the help to buy ISA in autumn and I'm aware this means I shouldn't open another ISA in the same year. I currently have a Cash and Shares ISA with Hargreaves and I'm unsure what I need to do with this, or what I'm best doing with this.

-should I remove the cash from this ISA now, before 6 April, or is it OK as long as I don't pay in after?
-if it's the case that I just shouldn't pay in after 6 April - could I put more money in today (I didn't use my whole allowance) and continue to buy and sell with that ISA during next year, without losing my allowance for the help to buy ISA?

Sorry if this is a very rookie-ish query, and thanks in advance for any advice.

masonic

There is no need to do anything with money paid in during this tax year because it won't affect the next.

You could top up your either your cash or S&S ISA now, before the end of the tax year (provided you are able to do so) if you wished.

During the next tax year, you would still be free to add to your S&S ISA (leaving enough of your allowance available to use for a HTB ISA).

NICHOLAS_2

I didn't realise you could have another ISA running and a HTB isa.

That's interesting.

It's free money so it's worth taking advantage of although with the economy performing better it is likely that by the time you get the maximum help from the gov prices will have gone up again, maybe even drastically.

If you treat it as interest then i guess it beats normal interest rates in the bank considerably.

I will be utilising it myself, although i already have a deposit for a house tucked away, and quite a big one, . Got bad credit for the next couple of years though and want to buy to renovate so need to save up for materials too and some money to live off.

I'll probably only get about £1500 out of mine, i don't wanna wait 5 years for it to finish.

masonic

NICHOLAS wrote: »

I didn't realise you could have another ISA running and a HTB isa.

That's interesting.

The HTB ISA will be a cash ISA, so the normal rules about only subscribing to one ISA of each type apply. Providing you don't subscribe to both a cash ISA and a HTB ISA in the same tax year you can retain any cash ISAs you hold and subscribe to a S&S ISA separately,

If you want to build up a cash ISA alongside a HTB ISA, you'd need to initially pay the money into a S&S ISA, then transfer to a cash ISA after the end of the tax year in question.

It's free money so it's worth taking advantage of although with the economy performing better it is likely that by the time you get the maximum help from the gov prices will have gone up again, maybe even drastically.

If you treat it as interest then i guess it beats normal interest rates in the bank considerably.

I will be utilising it myself, although i already have a deposit for a house tucked away, and quite a big one, . Got bad credit for the next couple of years though and want to buy to renovate so need to save up for materials too and some money to live off.

I'll probably only get about £1500 out of mine, i don't wanna wait 5 years for it to finish.

I don't think it will help buyers at all, as we'll probably see house prices inflate to absorb the free money. If you are not in a position to buy now, then the free money will enable you to compete against others who have it when you do come to buy.

Blankcanvas

Just to confirm my understanding - I can pay into my Cash and Shares ISA today - invest in a fund, and sell/buy within that ISA after Monday (without putting in further cash). And I can also open a HTB ISA in the autumn?

So by Christmas I'll have two separate ISAs which were opened in different years.

Thanks again for your help

colsten

masonic wrote: »

If you want to build up a cash ISA alongside a HTB ISA, you'd need to initially pay the money into a S&S ISA, then transfer to a cash ISA after the end of the tax year in question.

You could even do this in the same tax year. Whether it would be a sensible thing to do is an entirely different question as the cash ISA interest rates are so dire*. I would consider Regular Savers as alternatives before lumping into a normal cash ISA.

*The HTB ISA obviously sounds good for those who can use it, because of the government contribution.

colsten

Blankcanvas wrote: »

Just to confirm my understanding - I can pay into my Cash and Shares ISA today - invest in a fund, and sell/buy within that ISA after Monday (without putting in further cash). And I can also open a HTB ISA in the autumn?

So by Christmas I'll have two separate ISAs which were opened in different years.

The opening date is irrelevant - what counts is the deposit date(s). In 2015-16, you are allowed to split £15,240 between S&S and cash ISA any which way you like. The HTB ISA is going to be a cash ISA (assuming it will be implemented as planned), so keep the max you could put into it aside (£1,000 plus £200 a month for however many months remain).

You should, however, be careful with investing in an S&S ISA if you plan to use the money in the next 5-7 years. You don't want to find yourself needing your money when there is a market dip. Over a longer period of time, dips shouldn't matter. As I said before, if I was saving up for a deposit, I would look into alternatives such as regular savings accounts and/or interest paying current accounts.

Ed-1

colsten wrote: »

You could even do this in the same tax year. Whether it would be a sensible thing to do is an entirely different question as the cash ISA interest rates are so dire*. I would consider Regular Savers as alternatives before lumping into a normal cash ISA.

*The HTB ISA obviously sounds good for those who can use it, because of the government contribution.

You couldn't transfer from S&S to cash ISA in the same tax year as you subscribe to a help to buy ISA as the S&S subscriptions get redesignated as cash ISA subscriptions upon transferring them to a cash ISA so you would be contributing to a help to buy ISA and another cash ISA in the same tax year (i.e. 2 cash ISAs) which isn't allowed.