Lifetime ISAs guide

eskbanker

KBSMITH15 wrote: »

With regards to moving over the H2B to LISA...how do I go about that exactly? Is it just a matter of calling up my HTB provider in February and ask that it is transferred over before 1 March? How does that work with the 5 April deadline? Would I then just forget adding funds for March and April into my HTB and just start having them go straight to my LISA?

As with any other ISA transfer, it needs to be initiated via the new provider not the old one, so if you're transferring to a Skipton LISA you should follow their process as documented at https://www.skipton.co.uk/savings/isas/lifetime-isa/transfers, which also explains their 1 March deadline.

Once the transfer is complete then yes, pay into the new one rather than the old one.

snowqueen555

It seems unclear with how next years bonus will be paid. If I put in 4k in April, will I receive 1k that same month, or will be be split between 12 month payments?

eskbanker

snowqueen555 wrote: »

It seems unclear with how next years bonus will be paid. If I put in 4k in April, will I receive 1k that same month, or will be be split between 12 month payments?

If you pay in £4K within the claim period from 6 April 2018 to 5 May 2018, the ISA manager has another 14 days from the end of that period to claim the bonus, which should then actually be paid within another 14 days, so you should receive the bonus into your account by late May. The bonus is payable at 25% of contributions during that claim period, therefore £1K will be paid in one go once claimed.

epinjy

Just a quick FYI, maybe someone will find this information useful.

I have successfully transferred my Lloyds H2B ISA to a Skipton LISA using and printing off the form on their website. I mailed the form on Monday 11th December and the transfer was complete on 21st December. I could see my H2B balance in my LISA a few days before Skipton told me the transfer was complete.

I have also just checked with Skipton what my remaining allowance is for the year and the figure they have given me means that they are not counting interest earned towards contributions so I can make the full £4000 deposit this tax year (and I assume receive the first big bonus on the full balance including interest). Just clearing this up because I seem to remember reading that they was going to count interest earned on a H2B as contributions.

eskbanker

epinjy wrote: »

I have also just checked with Skipton what my remaining allowance is for the year and the figure they have given me means that they are not counting interest earned towards contributions so I can make the full £4000 deposit this tax year (and I assume receive the first big bonus on the full balance including interest). Just clearing this up because I seem to remember reading that they was going to count interest earned on a H2B as contributions.

When transferring an HTB ISA to a LISA during 2017/18, interest earned up to 5 April 2017 doesn't count towards the £4K annual LISA allowance but anything earned since 6 April 2017 does, as per clause 9B.17 of the ISA rules:

Any funds transferred from a Help to Buy: ISA to a Lifetime ISA that are:

• In excess of the amount held in the Help to Buy: ISA as at 5 April 2017,
• Transferred from a Help to Buy: ISA after the single transfer described above has taken place, or
• Transferred in 2018/19 or subsequent years

will be current year payments which will count towards the annual Lifetime ISA payment limit.

It will be necessary for ISA managers who are transferring Help to Buy: ISA funds to separate the transferred amount between:

• Previous year account (i.e. pre 6 April 2017) – which will not count towards the Lifetime ISA payment limit, and
• Current year account (i.e. 2017/18 subscriptions and proceeds, which will count towards the Lifetime ISA limit.

If Skipton appear to be telling you something to the contrary, you may wish to check with them and/or HMRC rather than simply believing that their version is correct as currently stated....

Ktlmeglou

Hi newbie here. Ive searched this thread but dont think my question has been asked yet, apologies if it has. I opened a LISA at the beginning of december. I understand I cant use it until 1st December 2018. Does that mean I cant even think about doing anything house hunting wise till then? Or could I start looking say sept time but just be aware that i cant complete until the 1st? Or could I not even put an offer in till the first? I understand from friemds experiemces that it can take months to get a house sale through so at what point (if any) in the house bying process could I get to by the 1st December? Thank you

Alexland

Ktlmeglou wrote: »

Hi newbie here. Ive searched this thread but dont think my question has been asked yet, apologies if it has. I opened a LISA at the beginning of december. I understand I cant use it until 1st December 2018. Does that mean I cant even think about doing anything house hunting wise till then? Or could I start looking say sept time but just be aware that i cant complete until the 1st? Or could I not even put an offer in till the first? I understand from friemds experiemces that it can take months to get a house sale through so at what point (if any) in the house bying process could I get to by the 1st December? Thank you

Yes the LISA needs to be open 12 months before the money can be drawn without penalty.

We have bought 4 properties and sold 3 and they have taken between 2 and 6 months to complete. It takes longer if the other party is hopelessly unresponsive or if there is a chain above you outside your control (although some properties are marketed as chain-free and then the seller reveals a chain about a month into the process). My advice is never trust anyone unless they are working for you and even then they might not be competent or focused.

In every case we have exchanged and completed on the same day so we never had to give the seller a deposit in advance. You still need to save up as the bank would expect you to be making a contribution. So the answer on when you draw the funds depends on the arrangements your convayencer agrees with the seller. Some sellers may request a deposit upfront but even then you shouldn't release the money until surveys have completed and any issues resolved. The more clued up and reliable you come across the less likely they are to demand a deposit.

I recommend finding a good firm of local solicitors rather than being referred by your bank or the seller's estate agent. It costs about the same. On referral the bank or estate agents get about 40% comission and farm the work out to re-branded call center conveyencers who are overworked (and barely qualified) so don't get a chance to give the job focus. Good local solicitors should give you the attention to help you plan (and negotiate) the cashflow and quality advice for any issues that may occur.

Alex

AirlieBird

epinjy wrote: »

I have also just checked with Skipton what my remaining allowance is for the year and the figure they have given me means that they are not counting interest earned towards contributions so I can make the full £4000 deposit this tax year (and I assume receive the first big bonus on the full balance including interest). Just clearing this up because I seem to remember reading that they was going to count interest earned on a H2B as contributions.

The legislation is ambiguous. The actual legal wording is that "the first or only transfer from a Help to Buy ISA (as described in regulation 5DDC(6)) to a Lifetime ISA in the year 2017-18 in an amount not exceeding the balance on the Help to Buy ISA as at 5th April 2017 plus accrued interest.”." does not count as current year subscriptions. You could read that as accrued interest to 5th April 2017 or all accrued interest transferred in addition to the balance at 5th April 2017.

norm_

I opened my Nutmeg LISA 6th April 2017.

I may be in a position to complete on a house purchase potentially early April 2018.

Is it necessary to wait for the government to apply the bonus before you can claim it? What sort of timeframe is this expected to be?

Alexland

The bonus for this tax year should go in the account in late April or May. You could also add another £4k from 6th April and you should have £10k in May. If you stay with Nutmeg (your other post suggests you are moving to Skipton) remember to allow some time for them to sell the S&S back to cash. Realistically you probably won't be able to complete with bonus until May sometime. Be careful of exchanging contracts with the seller with a fixed date too close to the bonus date incase of unexpected delays. You might end up completing in June if your seller can wait that long.

Alex.