Help to Buy & LISA's

EGORMAN

Hi All,

A couple of questions after watching tonight's Martin Lewis on HTBs/LISAs...

I currently have a HTB, by April I'll have the maximum £3400 in the account which I planned on transferring to a LISA to maximise on the amount I could put in/get at the end of next year. My first question is if I did that would I get the 25% bonus for saving for the past year in the HTB?

Secondly, one of his ideas was if you're unsure when you will buy/you may buy within a year, was to open a LISA with £1 on April 6th, then on April 5th 2018 if you haven't bought yet transfer the full amount into the LISA and pay £4000 in to get the 25% bonus. Would it be possible to continue to save in the HTB ISA throughout 2017/18 tax year then on 5th April 2018 transfer into the LISA without affecting the £4000 allowance? Or would the amount I'd saved in 2017/18 eat into that allowance? Would this actually be possible as I thought one of the constraints of a HTB ISA was that you weren't able to pay into another ISA in the same tax year?

Finally, I am not sure whether this is known yet, but will you be allowed other ISA's with the LISA?

Thanks in advance!
Emily

Ed-1

EGORMAN wrote: »

Hi All,

A couple of questions after watching tonight's Martin Lewis on HTBs/LISAs...

I currently have a HTB, by April I'll have the maximum £3400 in the account which I planned on transferring to a LISA to maximise on the amount I could put in/get at the end of next year. My first question is if I did that would I get the 25% bonus for saving for the past year in the HTB?

Secondly, one of his ideas was if you're unsure when you will buy/you may buy within a year, was to open a LISA with £1 on April 6th, then on April 5th 2018 if you haven't bought yet transfer the full amount into the LISA and pay £4000 in to get the 25% bonus. Would it be possible to continue to save in the HTB ISA throughout 2017/18 tax year then on 5th April 2018 transfer into the LISA without affecting the £4000 allowance? Or would the amount I'd saved in 2017/18 eat into that allowance? Would this actually be possible as I thought one of the constraints of a HTB ISA was that you weren't able to pay into another ISA in the same tax year?

Finally, I am not sure whether this is known yet, but will you be allowed other ISA's with the LISA?

Thanks in advance!
Emily

You aren't able to pay into another *cash* ISA in the same tax year (as a Help to Buy ISA is a cash ISA). Lifetime ISA is a new type of ISA so you can have one of each.

Anything transferred across from a Help to Buy ISA to a LISA in tax year 2017/18 only doesn't count towards the £4,000 LISA contribution limit, so you can pay in £4,000 as well as the H2B ISA money (through a formal ISA transfer - don't do it yourself or it will count as new money and use up the allowance).

Owen1991

you could keep paying in £200 a month(adds up to £2400 over the full year) to the H2B ISA during 2017/18 and also put £1600 into the LISA during 2017/18 and then transfer across the H2B money on the 5th of April 2018(or before) and get the full bonus.

This would add to a total of £4000 which is the limit.

Eco_Miser

Ed-1 wrote: »

Anything transferred across from a Help to Buy ISA to a LISA in tax year 2017/18 only doesn't count towards the £4,000 LISA contribution limit, so you can pay in £4,000 as well as the H2B ISA money (through a formal ISA transfer - don't do it yourself or it will count as new money and use up the allowance).

No.
Previous years HTB contributions don't count toward the LISA limit, but 2017/8 contributions do.

SalarySlave

So I am interested in this also.I currently have a HTB with currently £4089.84 so £4489.84 by April. if I transfer this and then add £4000 to max out the LISA giving a total of £8489.84 Do I get the 25% bonus on the lot in April 2018? or only on the newly deposited £4000

bowlhead99

SalarySlave wrote: »

So I am interested in this also.I currently have a HTB with currently £4089.84 so £4489.84 by April. if I transfer this and then add £4000 to max out the LISA giving a total of £8489.84 Do I get the 25% bonus on the lot in April 2018? or only on the newly deposited £4000

The lot.

Up to a maximum of

£4000 of tax year 2017/18 contributions (whether made directly into your LISA or added to the HTB and then transferred in),

*and*

up to £whatever you have in the HTB which came from 2016/7 and earlier years' contributions.

Ashers92

The way I see it, and how I'm thinking going about it is as below:

Open a LISA on the first day of 17/18 tax year with £4000 of contributions. Start earning interest on that.

Continue paying into the HTB ISA, which will be at £4200 going into the new tax year. So pay in £2400 during 17/18 tax year giving me a total of £6600 by April '18.

Just before the close of the tax year, transfer the £6600 into the LISA, giving me a total of £10600 in the LISA, ready to receive £2650 of bonus at the start of the 18/19 tax year.

Plan to do this in both my own and my girlfriends ISAs therefore maximizing potential savings and having £26500 post bonus in April '18.

Ed-1

Ashers92 wrote: »

The way I see it, and how I'm thinking going about it is as below:

Open a LISA on the first day of 17/18 tax year with £4000 of contributions. Start earning interest on that.

Continue paying into the HTB ISA, which will be at £4200 going into the new tax year. So pay in £2400 during 17/18 tax year giving me a total of £6600 by April '18.

Just before the close of the tax year, transfer the £6600 into the LISA, giving me a total of £10600 in the LISA, ready to receive £2650 of bonus at the start of the 18/19 tax year.

Plan to do this in both my own and my girlfriends ISAs therefore maximizing potential savings and having £26500 post bonus in April '18.

You can't transfer £6,600 from the Help to Buy ISA to the LISA as the £2,400 from 17/18 contributions counts against the £4,000 LISA limit which you've already used.

greenglide

Continue paying into the HTB ISA, which will be at £4200 going into the new tax year. So pay in £2400 during 17/18 tax year giving me a total of £6600 by April '18.

Just before the close of the tax year, transfer the £6600 into the LISA, giving me a total of £10600 in the LISA, ready to receive £2650 of bonus at the start of the 18/19 tax year.

You can't transfer £6,600 from the Help to Buy ISA to the LISA as the £2,400 from 17/18 contributions counts against the £4,000 LISA limit which you've already used

I have this feeling that may people will not understand that if you subscribe to a HTB ISA and a LISA in 2017 / 2018 the maximum you can put in the LISA is £4,000 less the amount subscribed to the HTB (max £,2400) in the year.

HMRC and the providers will have to spend a lot of time sorting out the mess!

Ashers92

Ed-1 wrote: »

You can't transfer £6,600 from the Help to Buy ISA to the LISA as the £2,400 from 17/18 contributions counts against the £4,000 LISA limit which you've already used.

I was not aware of that! No point leaving the HTB running then so might as well transfer it over as soon as possible.

Ed-1

greenglide wrote: »

I have this feeling that may people will not understand that if you subscribe to a HTB ISA and a LISA in 2017 / 2018 the maximum you can put in the LISA is £4,000 less the amount subscribed to the HTB (max £,2400) in the year.

HMRC and the providers will have to spend a lot of time sorting out the mess!

A receiving provider should simply reject the transfer in the case of the limit being exceeded, as they would any other ISA transfer which exceeded the ISA limit.

Although this is where it gets messy as I've seen stories on here in the past of a receiving ISA provider posting the cheque back to the account holder and then it's lost its ISA status (or special 25% bonus status as well in this case).