Lifetime ISAs guide

ashalinga

If you have over 4k in a Help to Buy ISA is it financially better to transfer the money into a LISA (and thus being unable to deposit any more in the LISA this year), or would it be more financially beneficial to keep the Help to Buy ISA and put an additional 4k in a LISA?
Thanks

Alexland

asacarter wrote: »

Who checks to see if you have ever had a mortgage before and how do they check?

Well you are required to make a declaration that this a first time residential purchase. Your conveyancer will pass this declaration on to the ISA Manager who passes it onto HMRC who may check it against relevant records (land registry, etc) and take action if they believe the declaration to be false.

cute-stray

Hi everyone!
I'm wondering if it's worth transferring my HTB ISA to a LISA.
I am no longer a first time buyer, since i recently bought into the home i share with my partner and was told by our conveyancer i was not eligible for the HTB bonus.
I'm 36 and already have a pension, we have home improvements underway and i would expect to want to access the money before i'm 50, maybe in the next few years.
Would i be able to accumulate the annual bonus until the sum is used, to outweigh the 6% penalty? Should i be looking at a different product?
Thank you.

Alexland

ashalinga wrote: »

If you have over 4k in a Help to Buy ISA is it financially better to transfer the money into a LISA (and thus being unable to deposit any more in the LISA this year), or would it be more financially beneficial to keep the Help to Buy ISA and put an additional 4k in a LISA?

You can only use the bonus from one of these accounts towards a property purchase. If you have over £4k in a HTB ISA then some if this will relate to contributions and interest earned in a previous tax year so this part will not count towards the £4k limit. As such you can transfer the HTB to a LISA and contribute more to get up to £4k this tax year.

Alexland

cute-stray wrote: »

I'm wondering if it's worth transferring my HTB ISA to a LISA.I am no longer a first time buyer, since i recently bought into the home i share with my partner and was told by our conveyancer i was not eligible for the HTB bonus.
I'm 36 and already have a pension, we have home improvements underway and i would expect to want to access the money before i'm 50, maybe in the next few years.
Would i be able to accumulate the annual bonus until the sum is used, to outweigh the 6% penalty? Should i be looking at a different product?

If you already own property you are no longer eligible to hold a HTB ISA so you need to do something as you are currently breaking the HMRC rules.

The earliest a LISA can be accessed with bonus and without penalty is 60. If you need access in the next few years you would be better with a cash savings product possibly using your personal savings allowance as cash ISA rates are poor. Maybe consider the Nationwide 5% Flex Direct and associated 5% Regular Saver accounts.

Alex

Apathy

Before looming through the entire thread, is anyone too concerned about the fact
that the min age of which you can withdraw is 60 ( but the goalposts can be moved at anytime) like say 63-65 for the younger generation so start saving now?

Alexland

Apathy wrote: »

Before looming through the entire thread, is anyone too concerned about the fact that the min age of which you can withdraw is 60 ( but the goalposts can be moved at anytime) like say 63-65 for the younger generation so start saving now?

It is a risk but you can withdraw early with loss of bonus and a small penalty if required. I think it's more likely that the date you can access a personal pension would be pushed back to 60 before we see the LISA date pushed back.

Still who knows what will happen in the future you need to make decisions now on information that is available.

System

hbell86 wrote: »

I have contacted Skipton again, and they assure me that the interest made from my H2B ISA this tax year will not count towards my 4K LISA allowance.

I was categorically told the opposite. By Skipton...

Alexland

NevvyC wrote: »

I was categorically told the opposite. By Skipton...

Ok the choice is to believe the Skipton advisor that agrees with the HM Treasury clarification note or the Skipton advisor who doesn't...

eskbanker

There are actually three separate possible options to consider here when assessing how much of the interest paid into a HTB ISA during 2017/18 counts towards the annual £4K LISA allowance when transferring!

1. None.
2. All.
3. Only a pro rata amount relating specifically to the period since 6 April 2017.

hbell86's Skipton advisor is apparently saying option 1 but it's not clear whether NevvyC's one is going with option 2 or 3.

The ISA scheme rules (as quoted in post #1096 above) seem to suggest that option 2 is the right answer but the Treasury letter subsequently clarified that option 3 is the correct one.