H2B into LISA

eskbanker

Ashen wrote: »

I think that bold part must be in the context of money you contribute to H2B in 2017-18 *and* transfer?

Yes, the first sentence sets the context for the second and third. Perhaps clearer if formatted as:

The impact on your LISA allowance of transferring a Help to Buy ISA in depends on when you contributed:

• All money contributed to a Help to Buy ISA before LISAs launched (ie, before 6 April 2017) can be transferred in without affecting your LISA allowance – and you can get both the max £1,000 LISA bonus, plus the bonus on that Help to Buy ISA cash on top.
  
  
• Any money you contribute to the Help to Buy ISA after LISAs launch however will eat up your LISA allowance.

Ashen

Thanks. I wish the MSE guide had set that out as a clear option at the outset, as it's all focused on best timings to transfer a H2B ISA, and doesn't make doing that apparent in the slightest - which has led to me sending off an ISA transfer form which now I just hope I've managed to cancel.

hbell86

Does the interest made in your H2B ISA in the 2017/18 tax year count towards your LISA allowance when you transfer it across to a LISA? Or is it just your physical contributions made this tax year that count towards your LISA allowance.

eskbanker

hbell86 wrote: »

Does the interest made in your H2B ISA in the 2017/18 tax year count towards your LISA allowance when you transfer it across to a LISA? Or is it just your physical contributions made this tax year that count towards your LISA allowance.

The rules state that interest earned on a HTB in 2017/18 does count towards your £4K LISA annual allowance when transferring, although as per post #8 above, theoretically any interest earned but not paid as at 5 April 2017 doesn't count, so HTB providers should differentiate between interest relating to 2016/17 and 2017/18 when transferring into a LISA.

Having said that, some posters have reported that figures provided by HTB and/or LISA providers don't actually follow the official rules so it seems there is some scope for interpretation, so see what your providers tell you when you transfer and if you plan to top your LISA up to £4K post-transfer then base your figure on their answers....