Lifetime ISAs guide

System

Well, just got off the blower with Skipton and they are all over the place :rotfl:

According to them I still have £3899 of allowance left ...

Despite the fact I explained I had made a subscription to Nutmeg for £100 and then transferred this over to Skipton where a £1 subscription was made (this would make sense for the 3899 figure remaining... Though I then stated that I had earned most, if not all of the interest on the H2B ISA I also transferred over in this tax year (as I only oppened it 2months prior to the start of this tax year) and should that £25ish not be deducted from the 3899 figure ? As I had previously rung up to ascertain that this tax years' interest DID count towards the allowance from another Skipton colleague... However, this colleague was adamant that my remaining allowance was 3899 and also mentioned that my H2B provider had only stated £1.27 as interest earned this tax year from my H2B (which seems completely innacurate - and moreover would be more likely the sum, if any, I earned from interest on it LAST tax year - as the bulk of interest must have come from the last 10 / 11months... Not the first 1 or 2months!)

They then proceeded to tell me that's why it was 3899 remaining because of the 99.87 I transfered from Nutmeg (my portfolio dropped 13p, no big deal as only 13p and it was only for the clock ticking...) and the interest I had had quoted from my H2B provider during the transfer process (even though those 2 figures don't add up to 101 and moreover that doesn't even include my Skipton subscription of £1 then!)

So now I'm not sure what to do :T

I may just go with what they are saying since they are the LISA providers n all, and if they're in the wrong then it's their mess to clean up not mine - since I've done everything I can to play by the rules and made numerous calls to try to ascertain correct & accurate information !?

ryath

I transferred my HTB ISA balance as at 5/4/17 to a LISA. Does the rule about interest earned in a HTB ISA reducing the amount you can contribute to a LISA this tax year still apply if you don't transfer your post 6/4/17 HTB ISA?

Alexland

ryath wrote: »

I transferred my HTB ISA balance as at 5/4/17 to a LISA. Does the rule about interest earned in a HTB ISA reducing the amount you can contribute to a LISA this tax year still apply if you don't transfer your post 6/4/17 HTB ISA?

You can still contribute £4k into your LISA if you have left your current tax year contributions and interest in your HTB ISA.

Ithilien

We're due to complete on a newbuild, which falls in the LISA price bracket but is over the HTB ISA limit.

We've both held LISA's since 6/4/17 (Nutmeg). We're in the process of moving this LISA to an AJ Bell one, as they accept HTB ISA transfers. We're also moving both our HTB ISAs to the LISAs.

We are wondering how it works if we need to complete by say April 10th, whilst it looks like the government bonus won't be paid until a few weeks later. Can anyone help?

Alexland

Ithilien wrote: »

We're due to complete on a newbuild, which falls in the LISA price bracket but is over the HTB ISA limit.

We've both held LISA's since 6/4/17 (Nutmeg). We're in the process of moving this LISA to an AJ Bell one, as they accept HTB ISA transfers. We're also moving both our HTB ISAs to the LISAs.

We are wondering how it works if we need to complete by say April 10th, whilst it looks like the government bonus won't be paid until a few weeks later. Can anyone help?

Yes the bonus might not be paid until late April or early May. In addition the LISA provider will take some time to process the solicitors withdrawal request.

Without knowing your full circumstances it's hard to comment but from a purely bonus perspective it sounds like you would be best delaying completion if possible.

Alex.

cisamcgu

I have looked, but cannot see if this has been answered before, apologies if I am repeating a question :

If someone opens a S&S LISA with £4000 then they get a government bonus of £1000 making their total £5000.

They leave this for a few years and say it has grown to £7000 with no further investments. i.e. £2000 'profit'

If they then want to withdraw this money early, not for a house or because they are 60, do they have to pay back

a) 25% of £7000 to the government (£1750) leaving them with £5250 [£7000-£1750]
or
b) 25% of £5000 (£1250) leaving them with £5750 [£7000-£1250].

i.e. is the 25% payback from the initial amount or from the current value ?

eskbanker

cisamcgu wrote: »

is the 25% payback from the initial amount or from the current value ?

It's the latter, the penalty is 25% of the amount withdrawn.

asc1991

Let's say my 25% bonus to my monthly LISA contributions is paid on the 25th of every month...
.
On June 3rd I put £1000 into my LISA.... on June 11th I then use my entire LISA for a deposit on a house...

How do I get the 25% bonus on that £1000. I spoke to HMRC and they say that I would be entitled to that bonus. But the lady was quite blunt saying she didn't know how I'd get it.

Alexland

There is a difference between being entitled to a bonus and getting access to it.

I guess in that situation you will have made your property withdrawal before the bonus was added so the bonus would later be added to the account and earn interest until you withdraw it (paying the penalty on the withdrawn amount) or access at 60+ with no penalty.

asc1991

Thanks.

That was one of the scenarios I considered. Whilst £1000 would be better, £750 is still better than nothing.

HMRC had absolutely no idea how it would work, they simply haven't considered it at all.