Help to Buy ISA guide

skiddles

Martin recently said on TV that parents could not contribute to their child's HTB isa and still qualify for bonus saying the money had to come from the account holder, ie. the child.
I searched the gov.uk website but was unable to find any reference to this. I am obviously missing something as Eskbanker stated in a reply on December 4th that grandparents are allowed to contribute.
Please can you clarify this. Thank you.

eskbanker

skiddles said:

Martin recently said on TV that parents could not contribute to their child's HTB isa and still qualify for bonus saying the money had to come from the account holder, ie. the child.
I searched the gov.uk website but was unable to find any reference to this. I am obviously missing something as Eskbanker stated in a reply on December 4th that grandparents are allowed to contribute.
Please can you clarify this. Thank you.

Perhaps worth reading through this subsequent brief thread where this topic of contributions from third parties is explored in more detail, including reference to the discussion on that TV show: https://forums.moneysavingexpert.com/discussion/6221684/lisa

The bottom line is that https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors#cash-subscriptions is a bit ambiguous (it does say that subscriptions can be from third parties but also that it must be the investor's own cash) and so individual providers can choose to interpret this guidance in different ways and/or impose their own conditions....

ratechaser

Quite glad that my 17YO daughter got an HTB ISA set up just before they were pulled. She's now in effect got a £200/month regular saver with Nationwide paying 2.5%.

With that, frankly who cares about whether she gets the bonus for buying a property (not much under 250k that I'd want her living in round our way!)

MDMD

ratechaser said:

Quite glad that my 17YO daughter got an HTB ISA set up just before they were pulled. She's now in effect got a £200/month regular saver with Nationwide paying 2.5%.

With that, frankly who cares about whether she gets the bonus for buying a property (not much under 250k that I'd want her living in round our way!)

Unfortunately they cut the rate to 1% back in May 

https://www.nationwide.co.uk/about/media-centre-and-specialist-areas/media-centre/press-releases/archive/2020/04/nationwide-announces-changes-to-savings-and-current-account-rates

masonic

MDMD said:

ratechaser said:

Quite glad that my 17YO daughter got an HTB ISA set up just before they were pulled. She's now in effect got a £200/month regular saver with Nationwide paying 2.5%.

With that, frankly who cares about whether she gets the bonus for buying a property (not much under 250k that I'd want her living in round our way!)

Unfortunately they cut the rate to 1% back in May

I was going to say if they were still paying 2.5% why on earth did I transfer mine out.

eskbanker

MDMD said:

ratechaser said:

Quite glad that my 17YO daughter got an HTB ISA set up just before they were pulled. She's now in effect got a £200/month regular saver with Nationwide paying 2.5%.

With that, frankly who cares about whether she gets the bonus for buying a property (not much under 250k that I'd want her living in round our way!)

Unfortunately they cut the rate to 1% back in May 

https://www.nationwide.co.uk/about/media-centre-and-specialist-areas/media-centre/press-releases/archive/2020/04/nationwide-announces-changes-to-savings-and-current-account-rates

Oops - looks like chasing rates wasn't hereditary then

emmorey

I think this has likely been answered but I’m struggling to find the answer for my exact scenario.

My house build has been delayed and in that time I’ve filled the whole Help to Buy ISA from Santander up to £12,000. I’ve stopped paying into it now. I have an overdraft and credit card to gradually pay off too.

The mortgage deposit was set in early 2020 at £11,800. I’m going via a Help to Buy loan. I haven’t paid any of my deposit to the house builders yet, since they let me delay until completion to complete my savings - I’ve only paid a reservation of £500.

I was so hopeful that the bonus would be 25% (£3000). I gather that I don’t get to keep the bonus to buy flooring etc (I have to pay about this same amount though). So can I claim the bonus and still use it to pay off more of the property? I feel like I was saving so hard thinking I’d get this bonus, and I don’t want it to just disappear. 

The alternative is I take out a chunk from the ISA early and use it to repay other debts, knowing I’ll still get 25% bonus of the remaining ISA amount towards the deposit. But this feels risky since I will have to wait for it to be paid at completion and I need to make sure I don’t lose my proof of funds just in case something falls through with my mortgage.

Feel a bit gutted and confused, and no one seems to know what I should do for the best. 

Thanks

masonic

emmorey said:

My house build has been delayed and in that time I’ve filled the whole Help to Buy ISA from Santander up to £12,000. I’ve stopped paying into it now. I have an overdraft and credit card to gradually pay off too.

The mortgage deposit was set in early 2020 at £11,800. I’m going via a Help to Buy loan. I haven’t paid any of my deposit to the house builders yet, since they let me delay until completion to complete my savings - I’ve only paid a reservation of £500.

I was so hopeful that the bonus would be 25% (£3000). I gather that I don’t get to keep the bonus to buy flooring etc (I have to pay about this same amount though). So can I claim the bonus and still use it to pay off more of the property? I feel like I was saving so hard thinking I’d get this bonus, and I don’t want it to just disappear. 

The alternative is I take out a chunk from the ISA early and use it to repay other debts, knowing I’ll still get 25% bonus of the remaining ISA amount towards the deposit. But this feels risky since I will have to wait for it to be paid at completion and I need to make sure I don’t lose my proof of funds just in case something falls through with my mortgage.

The bonus of £3,000 must be used towards completion of the property purchase. There is no rule that the balance of the HTB ISA must be used for this, so some of that £12,000 could be used to buy flooring etc, or pay off other debts.

When you close your HTB ISA, you immediately get access to those funds, but have 12 months to claim the bonus and complete the purchase.

emmorey

masonic said:

emmorey said:

My house build has been delayed and in that time I’ve filled the whole Help to Buy ISA from Santander up to £12,000. I’ve stopped paying into it now. I have an overdraft and credit card to gradually pay off too.

The mortgage deposit was set in early 2020 at £11,800. I’m going via a Help to Buy loan. I haven’t paid any of my deposit to the house builders yet, since they let me delay until completion to complete my savings - I’ve only paid a reservation of £500.

I was so hopeful that the bonus would be 25% (£3000). I gather that I don’t get to keep the bonus to buy flooring etc (I have to pay about this same amount though). So can I claim the bonus and still use it to pay off more of the property? I feel like I was saving so hard thinking I’d get this bonus, and I don’t want it to just disappear. 

The alternative is I take out a chunk from the ISA early and use it to repay other debts, knowing I’ll still get 25% bonus of the remaining ISA amount towards the deposit. But this feels risky since I will have to wait for it to be paid at completion and I need to make sure I don’t lose my proof of funds just in case something falls through with my mortgage.

The bonus of £3,000 must be used towards completion of the property purchase. There is no rule that the balance of the HTB ISA must be used for this, so some of that £12,000 could be used to buy flooring etc, or pay off other debts.

When you close your HTB ISA, you immediately get access to those funds, but have 12 months to claim the bonus and complete the purchase.

Thanks for the reply - if that is doable and they will be fine with it all being above board, I'd like to hear from anyone who has successfully done this so I know how to word it to my solicitor.

I've asked the people working with me on this purchase the same questions and had no answers yet, so this forum is more helpful than anything! It is almost like barely anyone has gone through it before.

My last port of call was to phone the ISA experts at Santander and the H2B admin. 

masonic

emmorey said:

masonic said:

emmorey said:

My house build has been delayed and in that time I’ve filled the whole Help to Buy ISA from Santander up to £12,000. I’ve stopped paying into it now. I have an overdraft and credit card to gradually pay off too.

The mortgage deposit was set in early 2020 at £11,800. I’m going via a Help to Buy loan. I haven’t paid any of my deposit to the house builders yet, since they let me delay until completion to complete my savings - I’ve only paid a reservation of £500.

I was so hopeful that the bonus would be 25% (£3000). I gather that I don’t get to keep the bonus to buy flooring etc (I have to pay about this same amount though). So can I claim the bonus and still use it to pay off more of the property? I feel like I was saving so hard thinking I’d get this bonus, and I don’t want it to just disappear. 

The alternative is I take out a chunk from the ISA early and use it to repay other debts, knowing I’ll still get 25% bonus of the remaining ISA amount towards the deposit. But this feels risky since I will have to wait for it to be paid at completion and I need to make sure I don’t lose my proof of funds just in case something falls through with my mortgage.

The bonus of £3,000 must be used towards completion of the property purchase. There is no rule that the balance of the HTB ISA must be used for this, so some of that £12,000 could be used to buy flooring etc, or pay off other debts.

When you close your HTB ISA, you immediately get access to those funds, but have 12 months to claim the bonus and complete the purchase.

Thanks for the reply - if that is doable and they will be fine with it all being above board, I'd like to hear from anyone who has successfully done this so I know how to word it to my solicitor.

It is not out of the question that the solicitor may not understand the rules as well as we do, but if you do encounter any resistance then being familiar with the scheme rules does help: https://www.helptobuy.gov.uk/documents/2015/12/scheme-rules.pdf/

The declaration the solicitor will need to make is that: 7.6 (A) (v) (a) "the entire amount of the Bonus along with any accrued interest will be applied towards the acquisition of the property detailed at paragraph (A)(iii)(Payment of the Bonus) above by the Help to Buy: ISA Holder"

emmorey said:

My last port of call was to phone the ISA experts at Santander and the H2B admin. 

Well I'm not at all surprised that you didn't get a useful/accurate answer from your bank!