Lifetime ISAs guide

Chippy95

eskbanker wrote: »

Right answer but wrong reason - as above, interest will be paid pro rata whenever you transfer so you don't need to plan the transfer around the scheduled interest payment date.

Having said that, it's probably sensible to transfer in early/mid March anyway as you need to complete the transfer by 5 April in order to benefit from the one-off HTB/LISA transfer concession this tax year and it takes up to 15 working days (and will obviously be a busy time).

Or, to answer your question more succinctly, yes!

:beer: Thanks for the confirmation!

Next question! When I transfer my HTB ISA to my new LISA say mid March, could I then deposit an extra £4,000 before the 5th of April?

Cheers,
Matt

eskbanker

Chippy95 wrote: »

Next question! When I transfer my HTB ISA to my new LISA say mid March, could I then deposit an extra £4,000 before the 5th of April?

Only if you haven't paid anything into your HTB since 6 April 2017! The HTB money from before this tax year doesn't count towards the 2017/18 £4K LISA allowance but anything since then does, so would need to be deducted from the £4K before you top up the LISA at the end of the tax year.

If you've used up the full LISA allowance for 2017/18, you can of course pay another £4K into a LISA on 6 April 2018....

eskbanker

Lolly88 wrote: »

Exactly. The information I quoted was directly from their current terms and conditions on the ISA transfer page so if they haven't even updated their terms then it doesn't inspire confidence that they will do this in practice. But rather than speculating it is better just to contact Skipton direct and ask them.

Skipton (or HMRC) should indeed be able to clarify but as I read it, their reference to "if you continue to pay funds into your Help to Buy ISA...." doesn't necessarily endorse your interpretation that this includes interest added rather than new money being paid in, as there is generally a distinction made between new money and interest earned when considering annual ISA allowances, so I see the Treasury letter as clarifying their wording rather than contradicting it....

Shotgun_Rider

My partner is a 39 year old nurse who is already paying into her NHS pension. Paying into a LISA is surely a no-brainer for her?

Thanks

eskbanker

Shotgun_Rider wrote: »

My partner is a 39 year old nurse who is already paying into her NHS pension. Paying into a LISA is surely a no-brainer for her?

Personally I wouldn't see it as a no-brainer and would instead recommend that she uses some brainpower on the matter (before her 40th birthday!) to establish if it makes sense in her circumstances.

There is some info at https://www.moneysavingexpert.com/savings/lifetime-ISAs#pension2 to help with the decision....

Lolly88

eskbanker wrote: »

Skipton (or HMRC) should indeed be able to clarify but as I read it, their reference to "if you continue to pay funds into your Help to Buy ISA...." doesn't necessarily endorse your interpretation that this includes interest added rather than new money being paid in, as there is generally a distinction made between new money and interest earned when considering annual ISA allowances, so I see the Treasury letter as clarifying their wording rather than contradicting it....

You're missing the key part of that I quote. I'll quote it all again.....

If you continue to pay funds into your Help to Buy ISA after 5 April 2017 these funds, and interest earned, will count towards your £4000 allowance for 2017/2018.

I don't know what other way that could be interpreted? Like I said best to contact Skipton for clarification rather than making assumptions based on what HMRC have indicated and general 'ISA' rules because it's not reflecting in Skipton's current terms and conditions.

eskbanker

Lolly88 wrote: »

You're missing the key part of that I quote. I'll quote it all again.....

If you continue to pay funds into your Help to Buy ISA after 5 April 2017 these funds, and interest earned, will count towards your £4000 allowance for 2017/2018.

I don't know what other way that could be interpreted? Like I said best to contact Skipton for clarification rather than making assumptions based on what HMRC have indicated and general 'ISA' rules because it's not reflecting in Skipton's current terms and conditions.

I'm not missing what you're saying, just interpreting the wording differently!

My interpretation is that that reference to 'interest earned' applies specifically to the funds added in 2017/18, not interest earned on what was in there before, i.e. I'm reading it as "these funds, and interest earned [on these newly added funds]" whereas you're reading it as "these funds, and [all] interest earned".

If all interest paid into a HTB during 2017/18 prior to transfer to LISA counted towards the LISA allowance then this would apply whether or not new funds were added, but this clause is specifically about the scenario where you [customer] continues to pay in new funds.

Anyway, as I see it, both are valid interpretations of those words as written so we'll have to wait and see what transpires!

Lolly88

eskbanker wrote: »

I'm not missing what you're saying, just interpreting the wording differently!

My interpretation is that that reference to 'interest earned' applies specifically to the funds added in 2017/18, not interest earned on what was in there before, i.e. I'm reading it as "these funds, and interest earned [on these newly added funds]" whereas you're reading it as "these funds, and [all] interest earned".

If all interest paid into a HTB during 2017/18 prior to transfer to LISA counted towards the LISA allowance then this would apply whether or not new funds were added, but this clause is specifically about the scenario where you [customer] continues to pay in new funds.

Anyway, as I see it, both are valid interpretations of those words as written so we'll have to wait and see what transpires!

Fair enough, I see your point, makes sense.

beaverboy

Hi,

Can't seem to find an answer for this anywhere, I have a help to buy ISA with just over £4400 in it(£1000 put in this tax year), if I transfer that into a LISA before April 2018, I can obviously move the money I put in before April 2017 without affecting my allowance for this year, which means by April 2018 I can have the £4400 from the Help to Buy plus £3000 more from this years allowance - £7400.

Question, is the 25% from the Gov of the £7400 (£1850) or does it max out at £1000 just for the £4000 I put in this year?

Thanks

Dave

eskbanker

beaverboy wrote: »

Question, is the 25% from the Gov of the £7400 (£1850) or does it max out at £1000 just for the £4000 I put in this year?

It's the former - in late April/early May 2018 you'll get a bonus of 25% of whatever is in the LISA on 5 April.

And if you put another £4K in on 6 April, you'd get another 25% bonus on that a month after the first bonus payment!

Apart from the one-off HTB transfer concession though, annual LISA bonuses will subsequently be capped at £1K by virtue of the maximum annual contribution....