Transfer from Nutmeg Lifetime ISA to Skipton

Sibwa

Some first time buyers have help to buy ISAs and lifetime ISAs usually with nutmeg of they opened it earlier this financial year.
However, some of us who didn't want to risk our money in nutmeg investment ISA, opted for low risk. We needed the nutmeg ISA just to get the clock going for this financial year.
Now we need to max out on the £4000 allowance before the end of the financial year. And we think that's a bit risky.
Another option would be to open a Skipton Lisa and transfer our £100 from Nutmeg to Skipton and top up to £4000. This involves opening the Skipton Lisa in this financial year which is questionable.
It says on the government website lifetimeisa.campaign.gov.uk that we can only open one lifetime ISA per financial year.
So we're going to do the following:
1. 1 week before end of financial year, top up nutmeg to £4k.
2. In the new financial year, nutmeg will claim government bonus.
3. As soon as new financial year starts, open Skipton Lisa.
4. As soon as nutmeg receives government bonus, use Skipton ISA transfer service to transfer nutmeg funds into Skipton.
5. Top up Skipton for the new financial year.
6. Get 25% bonus on 2 financial year contributions (£4000x2) when buying house later this year.

A few people on some posts are talking about opening a Skipton Lisa asap despite having a nutmeg (which was presumably opened in this financial year). I am not sure if this is possible.

If you think otherwise please reply and let us know where you got the information from

Alexland

Yes even the low risk Nutmeg portfolios have investment risk and as they are heavily weighted towards bonds so have the potential to drop by more than the higher risk one in months where shares are doing well.

You are fine to transfer your LISA from Nutmeg to Skipton either this tax year or next tax year. It's the same LISA you are just changing provider.

The reason people are rushing to transfer to Skipton this tax year is they may wish to transfer in HTB ISAs in which the previous year contributions will not count towards the annual allowance if transfered this tax year.

Alex

megxx01

Alexland, does opening a Skipton LISA (and transferring the money in) not count as opening a second LISA account?

I'm in the same situation and when I tried to open the Skipton cash LISA (in order to transfer the money from both HtB ISA and nutmeg LISA), I read the following: 'You can only open 1 LISA per tax year'. Confused...

Any advice would be greatly appreciated!

badger09

megxx01 wrote: »

Alexland, does opening a Skipton LISA (and transferring the money in) not count as opening a second LISA account?

I'm in the same situation and when I tried to open the Skipton cash LISA (in order to transfer the money from both HtB ISA and nutmeg LISA), I read the following: 'You can only open 1 LISA per tax year'. Confused...

Any advice would be greatly appreciated!

You can open as many ISAs, of each type, as you wish.

You can only subscribe (pay new money in) to one of each type at a time.

So if you're opening your Skipton LISA just to transfer your Nutmeg LISA, making sure Skipton do the transfer, you're fine.

Typically the ISA application form is not well written.

arthdog

Hi, just an additional question to the above. It says you need to have the account open for 12 months before you can use it to buy a house. If I transfer my LISA from Nutmeg to Skipton, does that restart this timer or does it simply continue on? Many thanks

Alexland

No the timer will continue. HMRC don't care who your provider is. However I would suggest you keep a printout showing your Nutmeg account opening date just incase the information doesn't get handed over correctly and you have to prove it later.

leeh3

Are you sure it doesn't reset the timer? The MSE guide suggests otherwise, but it might be referring to ISAs that have been subscribed to in different tax years:
"It's worth bearing in mind that if you open multiple LISAs, each one needs to have been open for more than 12 months to qualify. However, there's a way around this. Simply transfer all the money into the oldest one before you buy – then it all counts."

I'm in the same position, thinking I might buy in the next 12 months. I have a Nutmeg LISA and a Halifax HTB ISA and want to transfer both into a Skipton Cash LISA. I'm a bit nervous about going ahead and not being able to use any bonus.

Alexland

See page 154

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/603261/ISA_Lifetime_ISA.pdf

"The 12 month rule applies to the earlier account in relation to transferred Lifetime ISAs, or accounts opened for a defaulted Lifetime ISA payment or returned withdrawals following the failure of an earlier purchase."

Alex