Lifetime ISAs guide

eskbanker

AirlieBird wrote: »

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.

I would argue, as I did back in post #967 further upthread when a related query came up before, that the Treasury clarified this in their subsequent 18 April 2017 letter to mean the former, i.e. interest accrued up to 5 April 2017 not all subsequent interest, the key wording being:

The amount that can be transferred from a Help to Buy: ISA to a Lifetime LISA in the 2017-18 tax year without being treated as a contribution to the Lifetime ISA is the value in the Help to Buy: ISA account as at 5 April 2017 plus any interest that has accrued on that amount, but not yet been paid into the Help to Buy: ISA account, as at 5 April 2017.

hally1122

Hi,

Opened a Lifetime ISA yesterday (using as first time buyer), I need to leave this open for a year to get the bonus applied to my account. So i think any bonus will be paid in end of tax year 2019?

Just wondering if I opened up a help to buy ISA now and started paying in monthly (with the lump sump to start account), can this then be transferred into the lifetime ISA before the end of the tax year 2019 and still get the bonus? I've read that some of the money coming from the help to buy ISA doesn't count against the 4k limit in the lifetime ISA, so is the bonus then lost from the help to buy ISA?

Many thanks,
Lar

eskbanker

hally1122 wrote: »

Opened a Lifetime ISA yesterday (using as first time buyer), I need to leave this open for a year to get the bonus applied to my account. So i think any bonus will be paid in end of tax year 2019?

No, it needs to be open for a year before it can be used without penalty, but you'll receive a bonus in late April/early May 2018 for anything in it by 5 April 2018, and then bonuses are paid the month after any qualifying contributions thereafter.

hally1122 wrote: »

Just wondering if I opened up a help to buy ISA now and started paying in monthly (with the lump sump to start account), can this then be transferred into the lifetime ISA before the end of the tax year 2019 and still get the bonus?

No, you can earn a bonus on either a HTB ISA or a LISA but not both, for a first-time property purchase.

hally1122 wrote: »

I've read that some of the money coming from the help to buy ISA doesn't count against the 4k limit in the lifetime ISA, so is the bonus then lost from the help to buy ISA?

No, the concession you refer to relates only to pre-April 2017 contributions to a HTB ISA so doesn't apply to anyone starting out now.

Basically you can pay £4K into a LISA between now and 5 April 2018 and then another £4K any time in the year from then, and you'll receive the 25% bonus on all that. Forget about HTB unless you want to use it solely to earn a semi-decent interest rate (but no bonus) after filling your LISA up....

Probably worth spending time reading the article this thread is all about, to get an understanding of how the scheme works: https://www.moneysavingexpert.com/savings/lifetime-ISAs

Bikermike12345

Hi guys,

I’m very new to this forum so apologies if this is not in the place it needed to be, please go easy on me!

I’ve just opened a LISA, a little later than I should have I know but due to only one provider providing a cash LISA I thought I’d hang on to see if anyone else would offer one.

Anyway, I’m looking to buy my first home with my partner in about 13 to 18 months’ time. I’ve opened the LISA with £1.00 due to Martin’s advice regarding earning higher interest in other accounts until the account is ready to pay the bonus. I just have two questions and can’t see to find the answers and hopefully someone can help.

1. When is the bonus paid? I’ve found information on the MSE site that the bonus is paid annually in April/May 2018 and then monthly thereafter. Is this the position for whenever the LISA was created or is this based on the scenario that the LISA was opened when it first came out? I have £3,999.00 ready to deposit to obtain the 25% bonus but wasn’t sure whether it was paid in April/May 18 or on the anniversary of the bonus. Ideally I want to keep my money in my higher interest accounts as long as possible; also

2. Is the bonus paid on whatever money is in the account just before the bonus is paid? Or do the funds need to be in the account for a certain period before the bonus payment?

Thanks in advance for any advice you guys can give me.

Cheers

Mike

eskbanker

Bikermike12345 wrote: »

1. When is the bonus paid? I’ve found information on the MSE site that the bonus is paid annually in April/May 2018 and then monthly thereafter. Is this the position for whenever the LISA was created or is this based on the scenario that the LISA was opened when it first came out? I have £3,999.00 ready to deposit to obtain the 25% bonus but wasn’t sure whether it was paid in April/May 18 or on the anniversary of the bonus. Ideally I want to keep my money in my higher interest accounts as long as possible; also

2. Is the bonus paid on whatever money is in the account just before the bonus is paid? Or do the funds need to be in the account for a certain period before the bonus payment?

The bonus is paid on contributions during a given period, not on the balance. This entire tax year is the first such period, so all contributions made during 2017/18 (regardless of when) will qualify for a 25% bonus in late April/early May 2018, and then each 'tax month' (from 6th of one month to 5th of following month) is a bonus-earning period, in which all new contributions earn a 25% bonus in the following period.

Bikermike12345

That’s great. Thanks for your help!

Mike

Benp1

Is the 25% bonus paid on the final balance at the end of the year - or to receive the maximum bonus (on the £4000) do you need to open the ISA with the £4000 and have it sitting in there for the year?

Alexland

The LISA bonus is based on contributions during tax year not time in account. Anyone needing to transfer a HTB ISA better act quickly to avoid disappointment.

oz0707

Is there a full list of Lisa investment providers by charges. Can only find a few online. Hargreaves looking favourable to me for specific fund choice but Nutmeg seems popular here. Why is this? Seemed to have higher fees

eskbanker

oz0707 wrote: »

Is there a full list of Lisa investment providers by charges. Can only find a few online. Hargreaves looking favourable to me for specific fund choice but Nutmeg seems popular here. Why is this? Seemed to have higher fees

To the best of my knowledge there are only the four providers listed at https://www.moneysavingexpert.com/savings/lifetime-ISAs#bestbuysstocks, which does include high-level summary info on charges for each.

Nutmeg is a triumph of style over substance IMHO, a bit of marketing aimed at impressing a different audience from HL's, i.e. those who are more likely to be interested in packaged robo-investing rather than self-selecting.