Lifetime ISAs guide

simon430

Hello,


I opened a Nutmeg LISA straight away with £100, then I transferred this to Skipton. The value increased a little to £100.73 so this is what is currently sat in my Skipton LISA.


My question is, I've now transferred in my HTB and trying to calculate my remaining £4000 allowance. I'm right in thinking that interest earned post April 17 goes towards the annual allowance? So have I contributed £100 to my LISA, or is it £100.73? I know it's only 73p but may as well max out free money.

shaldonkoolma

Hi folks, sorry its a pretty basic (lol) question, and I have searched the forum for answers to this already....
In order for me to invest in a LISA and get the governement bonus for my 18 year old son who is a student, does he have to be a tax payer?
Also, my daughter is receiving PIP, could someone please clarify if this may be affected by saving in an ISA for her, and if it is, what my next best investment option for her would be so she is not disadvantaged compared to my son?
thank you in advance..

eskbanker

simon430 wrote: »

I opened a Nutmeg LISA straight away with £100, then I transferred this to Skipton. The value increased a little to £100.73 so this is what is currently sat in my Skipton LISA.

My question is, I've now transferred in my HTB and trying to calculate my remaining £4000 allowance. I'm right in thinking that interest earned post April 17 goes towards the annual allowance? So have I contributed £100 to my LISA, or is it £100.73? I know it's only 73p but may as well max out free money.

These are two separate issues - HTB interest and LISA interest.

For your HTB money, anything transferred into a LISA counts towards the £4K annual allowance, except for the balance at 5 April 2017 plus interest accrued but not paid up to that date.

Interest paid on LISA contributions, 73p in your case (so far), doesn't count towards the allowance.

eskbanker

shaldonkoolma wrote: »

In order for me to invest in a LISA and get the governement bonus for my 18 year old son who is a student, does he have to be a tax payer?

No, but he does need to be the one opening and funding the account.

ryath

eskbanker wrote: »

Yes and no respectively....

Thanks eskbanker.

I have since opened a Skipton LISA and want to transfer my HTB ISA balance as at 5/4/17. Halifax were not interested in calculating the interest accrued but not paid, but Skipton's online banking has a required field for the amount to transfer. I spoke to them and they said if they send a form to Halifax and my calculation is higher than theirs as a result the transfer request would be declined. Is it really worth trying to outsmart Halifax and do it correctly one wonders? I have the numbers for working out the accrued interest but got a little lost.

Gross interest paid 2/12/16 - £92.56 - Account balance £3692.56
4% interest up to and including 7/12/16
3.5% interest effective from 8/12/16
£200 a month paid by SO on the first working day of each month

Is this what everyone else is going through?

Sjh2323

Not sure if anyone can help?
I opened a LISA last July, does this mean I have to put £1k in before July this year or does it run on the tax year? So will I have to do it by March?

Alexland

shaldonkoolma wrote: »

Also, my daughter is receiving PIP, could someone please clarify if this may be affected by saving in an ISA for her, and if it is, what my next best investment option for her would be so she is not disadvantaged compared to my son?

Having a LISA is treated as accessable savings when being assessed for benefits. On this sub-forum we are not experts on benefits so you might be better asking elsewhere but from what I can see there is no savings test in the PIP eligibility criteria?

https://www.gov.uk/pip

Alexland

ryath wrote: »

I have since opened a Skipton LISA and want to transfer my HTB ISA balance as at 5/4/17. Halifax were not interested in calculating the interest accrued but not paid, but Skipton's online banking has a required field for the amount to transfer. I spoke to them and they said if they send a form to Halifax and my calculation is higher than theirs as a result the transfer request would be declined. Is it really worth trying to outsmart Halifax and do it correctly one wonders?

Personally I would just use the Halifax calculation on the form for an easy life. If there is a systematic errors in the way this has been implemented by the HTB providers (we haven't heard one getting it right yet?) then I wouldn't expect HMRC to come down to harshly on individual customers.

Alex

Alexland

Sjh2323 wrote: »

Not sure if anyone can help?
I opened a LISA last July, does this mean I have to put £1k in before July this year or does it run on the tax year? So will I have to do it by March?

It's based on tax years which ends on the 5th April and start on 6th April. However providers get busy towards the end of the tax year so usually worth getting things done in advance. You can put up to £4k into a LISA each tax year to receive a 25% bonus of up to £1k. If you only put £1k in this tax year your bonus will only be £250.

Alex

ryath

Alexland wrote: »

Personally I would just use the Halifax calculation on the form for an easy life. If there is a systematic errors in the way this has been implemented by the HTB providers (we haven't heard one getting it right yet?) then I wouldn't expect HMRC to come down to harshly on individual customers.

Alex

Thank you Alex. Yesterday I posted my HL S&S LISA transfer form alongside my HTB ISA (pre 5/4/17 funds) transfer form to Skipton, forgetting I have only paid £100 into my S&S LISA this tax year. Can I make up the remaining £3900 somehow or have I lost out by not paying it into my HL account first and then transferring it, bearing in mind the paying into one LISA per tax year rule?