Lifetime ISAs guide

Ed-1

snowqueen555 wrote: »

Fine by me, I am just after the 2% interest rate on the HTB. I do wonder how they monitor that stuff though, like a few years down the line how do they calculate the HTB bonus?

The Help to Buy ISA bonus is calculated on the closing balance of the account.

System

masonic wrote: »

Your solicitor/conveyancer would be the one able to confirm. They are responsible for consolidating the funds used for the purchase. It is their actions that will determine whether the LISA money can be used.

So I rang Barclays as a first port-of-call (I'm not in the position where I'm ready to buy so don't have solicitor/conveyancer...) and they spoke to their mortgage underwriters who said that the bonus wouldn't be able to be used in conjunction with the springboard account. Bit frustrating since the property & LISA would both be in my name !

Thinking of opening a Nutmeg S&S LISA anyway just so I have the option in May 2018 and can always withdraw pre-April 5th (17/18 tax year) without penalty according to the new ruling if I don't think I'm in a position to use the LISA (am I correct in thinking this LISA only needs the £100 opening deposit and no further monthly investments ? As I will transfer out ASAP to a cash LISA, for instance, Skipton in June... This is my understanding from the MSE article I just read but could have sworn I'd read somewhere earlier the Nutmeg S&S LISA would require minimum MONTHLY deposits -- if I left opening until May and then manage to get a Skipton cash LISA and transfer into before June ends then I could bypass an additional investment required and hence just leave £100 in the Skipton with the all-important clock ticking and my money able to earn interest elsewhere...) realise it may only be a £100pcm requirement, if memory serves, but still ... Would rather have the minimum in a LISA and have MAX spare funds available to use/earning interest elsewhere (unfortunately I can't wait until June for the likely £1 Skipton LISA opening deposit ... Need to be prepared for May 2018 - bit annoying there aren't any other cash LISAs cropping up; damn damp squib indeed!)

Thanks

yuvi01

My Wife is not working, so she does not have income on her own. Can I open a Lifetime ISA in her name and I pay for her into her LISA by direct debit. Will the taxman will question this ?

martinlewisjunior

I'm getting confused with other peoples opinions on this now.

My plan which is on going at the moment is that I've opened a Lisa isa with Nutmeg with £100.

Then I was going to continue paying into the Help to Buy Cash ISA. (as a fail safe option)

Come June open a skipton (or whatever bank)cash isa and transfer both my Help to Buy Cash ISA and my Lisa s&s isa into the new LISA cash isa.

However my confusion is whether I can do that as I would be effectively paying into two Cash ISA's in one year?

Can anyone confirm, if so I'll stop my Help to Buy contributions

MLJ

Ed-1

martinlewisjunior wrote: »

I'm getting confused with other peoples opinions on this now.

My plan which is on going at the moment is that I've opened a Lisa isa with Nutmeg with £100.

Then I was going to continue paying into the Help to Buy Cash ISA. (as a fail safe option)

Come June open a skipton (or whatever bank)cash isa and transfer both my Help to Buy Cash ISA and my Lisa s&s isa into the new LISA cash isa.

However my confusion is whether I can do that as I would be effectively paying into two Cash ISA's in one year?

Can anyone confirm, if so I'll stop my Help to Buy contributions

MLJ

A Lifetime ISA is not a cash ISA (neither is it a stocks and shares ISA). Whereas a Help to Buy ISA is a cash ISA.

martinlewisjunior

Ed-1 wrote: »

A Lifetime ISA is not a cash ISA (neither is it a stocks and shares ISA). Whereas a Help to Buy ISA is a cash ISA.

But come June the skipton Life ISA is a cash isa?

Ed-1

martinlewisjunior wrote: »

But come June the skipton Life ISA is a cash isa?

Nope. It's a Lifetime ISA.

There are 4 types of ISA set down in law:

Cash ISA,
Stocks and shares ISA,
Innovative finance ISA,
Lifetime ISA.

A Help to Buy ISA is a special type of cash ISA in law. A Lifetime ISA is a separate type of ISA completely which can hold either cash or stocks and shares.

You can pay into one of each of the above 4 ISA types per tax year subject to the £20,000 ISA allowance.

martinlewisjunior

Ed-1 wrote: »

Nope. It's a Lifetime ISA.

There are 4 types of ISA set down in law:

Cash ISA,
Stocks and shares ISA,
Innovative finance ISA,
Lifetime ISA.

A Help to Buy ISA is a special type of cash ISA in law. A Lifetime ISA is a separate type of ISA completely which can hold either cash or stocks and shares.

You can pay into one of each of the above 4 ISA types per tax year subject to the £20,000 ISA allowance.

The penny has dropped, I understand now

Thanks for your help!

:money:

badger09

yuvi01 wrote: »

My Wife is not working, so she does not have income on her own. Can I open a Lifetime ISA in her name and I pay for her into her LISA by direct debit. Will the taxman will question this ?

Your wife can open a LISA in her name.

You can pay money into your wife's LISA, but that money would then belong to your wife

Whether money can be paid in by direct debit will depend on the T&Cs of the particular LISA

The taxman (or tax lady:p) will not question this

Bear2017

Hi All,

I have a question on the Lifetime ISA.

Upon receiving the 25% government bonus of say £1000 from the max of £4000 annually saved, can you “play” with that bonus, as in, can it be reinvested such as dividends can, i.e. Can I buy additional funds or shares with the bonus, or does it just sit there in the LISA account untouched? I understand the power of compounding, especially with dividends, and taken that this would be ok to do, you could potentially have a starting ground every year of +25% on your annual return WITHOUT the returns of other shares/funds that are already allocated. That’s like a 25% bonus dividend on any money that you invest (as long as it’s under £4000).

Cheers
[FONT=&quot]Chris[/FONT]