Help to Buy ISA guide

bigsi70

Can anyone advise me please.

My son in law has just opened a Halifax HTB ISA but only deposited £600 (as that's all he had). This will then take him a few months to now get to the £1600 required beofre the government add their bonus.
Is he able to cancel the ISA, withdraw the money and then open an HTB ISA with Halifax or someone else and then put the full £1200 in?
It so happens that him and my daughter have found a place, but will have about 10 weeks to do the transaction, so could do it from the £1200 standing start with 2 x £200 monthly payments, but as it is now he won't get any bonus.

Pound

Support I have an existing cash ISA, say with £30K in and I transfer to a help to buy ISA. If I decide I'm not ready to buy a house after I've made the full contributions presumably I just need to keep the account open until I'm ready?

But what about the £30K, would my help-to-buy bonus be affected if I withdrew or transferred that to a different ISA?

masonic

bigsi70 wrote: »

My son in law has just opened a Halifax HTB ISA but only deposited £600 (as that's all he had). This will then take him a few months to now get to the £1600 required beofre the government add their bonus.
Is he able to cancel the ISA, withdraw the money and then open an HTB ISA with Halifax or someone else and then put the full £1200 in?
It so happens that him and my daughter have found a place, but will have about 10 weeks to do the transaction, so could do it from the £1200 standing start with 2 x £200 monthly payments, but as it is now he won't get any bonus.

Yes, he can close down the HTB ISA and start again (once) under the self-transfer rules. With Halifax, it would have to be £1000 + 3 x £200 (starting from the same month the lump sum is paid in). Other providers may allow a single £1200 deposit in the first month.

Pound wrote: »

Support I have an existing cash ISA, say with £30K in and I transfer to a help to buy ISA. If I decide I'm not ready to buy a house after I've made the full contributions presumably I just need to keep the account open until I'm ready?

Clearly it is not possible to transfer £30k into a HTB ISA, so I'm not sure what you mean here. If you aren't ready to buy a house, you can continue to hold the account until you are, or the scheme ends, whichever is sooner. You also have the option to transfer the HTB ISA money into a different type of ISA at any time.

Pound wrote: »

But what about the £30K, would my help-to-buy bonus be affected if I withdrew or transferred that to a different ISA?

Holding £30k in a separate cash ISA and then withdrawing from it or transferring it would have no bearing on your HTB ISA. You cannot add more money to any other cash ISA during the same tax year you have contributed to your HTB ISA though (with the exception of a small number of 'split ISA' providers).

no1jimmy

I've read the last few pages of this thread and have a reasonable idea of how to apply the advice to my own situation, but would like to see clarity nonetheless for peace of mind.

This financial year I've paid almost £1300 into an ISA, which I opened in April 2015.

I would now like to open a Help to Buy ISA - what steps do I need to take to ensure I'm not breaking any rules? Is a split ISA my only option?

Thanks in advance.

masonic

no1jimmy wrote: »

This financial year I've paid almost £1300 into an ISA, which I opened in April 2015.

I would now like to open a Help to Buy ISA - what steps do I need to take to ensure I'm not breaking any rules? Is a split ISA my only option?

No, it's not your only option. You could withdraw all the money from your existing ISA and then start a new HTB ISA. You could withdraw £100 from your existing ISA and then transfer the remaining (up to) £1200 of current year subscriptions to a new HTB ISA (by instructing your HTB ISA provider). Or you could transfer your existing cash ISA to a S&S ISA, then start a new HTB ISA. Any of these options would probably be preferable to a split ISA where you would tend to get a poor deal on both parts of your ISA.

Pound

masonic wrote: »

Clearly it is not possible to transfer £30k into a HTB ISA, so I'm not sure what you mean here. If you aren't ready to buy a house, you can continue to hold the account until you are, or the scheme ends, whichever is sooner. You also have the option to transfer the HTB ISA money into a different type of ISA at any time.

Somehow I thought it was possible to transfer a standard ISA into a HTB and the rules would apply to subsequent deposits. This makes more sense.

Holding £30k in a separate cash ISA and then withdrawing from it or transferring it would have no bearing on your HTB ISA. You cannot add more money to any other cash ISA during the same tax year you have contributed to your HTB ISA though (with the exception of a small number of 'split ISA' providers).

I think the gov got this wrong. A cash isa allows a deposit of ~£15k year whilst a HTB only allows £2.4k after the initial deposit. Yet despite different rules they're treated the same... it feels like the government have effectively taken away the £15k tax free savings contribution allowance, it's no longer possible if you also want a HTB.

On this my current ISA has matured so I'm only getting 0.25%. Am I allowed to transfer this to a new cash ISA without making any contributions AND open a HTB ISA and make contributions? The government website on HTB says I can't open two ISAs but I thought the rule is you can only contribute to one?

colinmk

Hi there,
Just wondering if anyone knows what will happen if I am saving in a help to by ISA and we gain independence in the next few years which is looking pretty likely? Would the bank/UK still have to honour this?
Thanks

masonic

Pound wrote: »

I think the gov got this wrong. A cash isa allows a deposit of ~£15k year whilst a HTB only allows £2.4k after the initial deposit. Yet despite different rules they're treated the same... it feels like the government have effectively taken away the £15k tax free savings contribution allowance, it's no longer possible if you also want a HTB.

It is possible if you are willing to split ISA. However, split ISAs aren't a very attractive option. Then again, standard cash ISAs aren't a very attractive option. Most people are best off saving into high interest current accounts. It is really only top earners who face this dilemma.

On this my current ISA has matured so I'm only getting 0.25%. Am I allowed to transfer this to a new cash ISA without making any contributions AND open a HTB ISA and make contributions? The government website on HTB says I can't open two ISAs but I thought the rule is you can only contribute to one?

The rule is that you cannot contribute to more than one cash ISA in the same tax year, so if you've not paid any new money into your matured cash ISA this tax year, you can open a HTB ISA and transfer your existing ISA.

However, it isn't worth taking a lower net rate in order to preserve the ISA status of the money if you will shortly be using that money to buy a house.

masonic

colinmk wrote: »

Hi there,
Just wondering if anyone knows what will happen if I am saving in a help to by ISA and we gain independence in the next few years which is looking pretty likely? Would the bank/UK still have to honour this?
Thanks

Who is the "we" that is gaining independence? The UK is almost certainly gaining independence, but that will have no effect. There is a small amount of speculation about Scotland wanting another independence referendum, but that is far from likely at the moment. If Scotland were to become independent, then under the current rules of the scheme, to qualify for the HTB ISA bonus you would need to buy a property in the UK and intend to live there.

jackmack26

MARTYM8` wrote: »

Yes - you can use your own £10,000 in your HTB isa once it is closed for the deposit.

But be careful with the timescales and make sure you use a solicitor signed up for the scheme.

However if you start now it will take you over 3.5 years to build up £10k in your HTB ISA - so it might be worth looking at the new lifetime isa from next April as this is more flexible (assuming you are under 40).

the deposit means deposit to be paid at exchange or completion?