H2B to LISA Transfer - info needed

Southpaw18

Calling all financial experts here....


I have been given varying info from both providers of my H2B ISA and my LISA I am transferring to. the transfer is now complete, but I cant seem to get a solid answer on what happens with my money so figured id see if I can get answers here.


I have transferred over 4.5k from the H2B to the LISA this month as from what I can tell, this makes sense. what im confused about is the allowances and what I will receive from the government for savings before this year.


So lets say I saved this:


2017-18 tax year = 1500
16-17 tax year = 1500
15-16 tax year = 1500 (1000 on start up, 500 through the year)

So the 17-18 amount goes towards this years LISA, so I can put another 2500 in to maximise the full 25% bonus from the government, which I intend to do before the April deadline.


My question is, what happens with the previous tax years money? Will I get H2B 25% on these when the house situation is all done (as per the H2B ISA would work), or does ALL of this figure transfer over and I get bonus from LISA on these previous years also?

I assume 17-18 is LISA money and all previous would be H2B, but just wanted to see as im getting mixed messages from my providers.


thanks in advance

ValiantSon

You can't get a dual bonus. The money you transferred in from HTB will receive the bonus in the LISA, along with any other money you deposit by 5th April.

Southpaw18

thanks for that.

So are you saying the 3000 from previous years will ALSO get 25% added on from the LISA? its just those 2 previous years providers seem a bit sketchy on.

Southpaw18

Sorry that's probably not clear. Some tell me only THIS year will get LISA bonus, and the previous years will be H2B. But that doesn't sound right.


So now ive transferred the money, can I expect 25% from the LISA on ALL of my transferred money and not just for this year? that's the confusion as firms are telling me varying things on previous tax years.


I guess my point is, if ive only put in 1500 this year, what happens with the 3000 I put in in previous years, is that literally just not making me a penny? If that's the case, then wouldn't it have made more sense after all this time to just stick the entire 4.5k in this year? just seems a waste the last couple years if im not making anything on it.


but im an idiot, so someone will explain it better im sure.

ValiantSon

My understanding is that all of the money in the HTB ISA that is transferred in by 5th April will get the 25% bonus, plus the bonus will also be paid on all direct contributions to the LISA in this tax year, i.e. up to £4000.

Southpaw18

thank you good sir! Beers on me when it comes through then!

Curos

VS is correct - if you're transferring all of the monies you set out in your OP you will receive the 25% LISA bonus on all of those monies in April/May of this year.

Of course, you would also have 2500 allowance remaining for this tax year if you did want to maximise the bonus you will receive.

You may want to consider keeping something in your HTB account instead of transferring it all and closing the account as if you did open it as early as your OP suggests, you probably have a decent'ish interest rate and could continue to contribute to and use the HTB as a Cash ISA? (As you are aware, you couldn't use this account to get the HTB bonus to buy a house if you use the LISA to buy a house, but you can withdraw the money from the HTB ISA penalty-free)

If you're transferring to a Skipton Cash LISA do remember that the deadline for them receiving your completed transfer-in form is 1 March 2018.

ACCA

Completion is scheduled to mid-end June 2018. I opened the LISA on the 7th June 2017. Obviously, the bonus is better if i transfer my HTB ISA to LISA, however not sure about the timing.

Could anyone advise what's the process of application to LISA bonus? If say the completion happens of the 20th of June, when do I (or the solicitors) will need to submit the application to get the saved funds and the bonus?

Thanks in advance.

ValiantSon

ACCA wrote: »

Completion is scheduled to mid-end June 2018. I opened the LISA on the 7th June 2017. Obviously, the bonus is better if i transfer my HTB ISA to LISA, however not sure about the timing.

Do you mean completion on your house purchase? If you do then what you currently have sounds like a speculative timescale. Completion is set at exchange of contracts, and is a date agreed to by all parties. Once you exchange the completion date is fixed, but before exchange it is a completely movable feast. If it would prevent you from using your LISA, simply don't agree to a completion date before 8th June.

ACCA

ValiantSon wrote: »

Do you mean completion on your house purchase? If you do then what you currently have sounds like a speculative timescale. Completion is set at exchange of contracts, and is a date agreed to by all parties. Once you exchange the completion date is fixed, but before exchange it is a completely movable feast. If it would prevent you from using your LISA, simply don't agree to a completion date before 8th June.

Thanks for your response. Yes, I do mean completion on my house purchase.

Do you wanna say that i can use LISA if this has been active for at least 12 months by the day of completion/ exchange? Is there a particular deadline for claiming? There are loads of info-threads on HTB ISA, but i don't seem to find when and how to claim for LISA at all.

ValiantSon

ACCA wrote: »

Thanks for your response. Yes, I do mean completion on my house purchase.

Do you wanna say that i can use LISA if this has been active for at least 12 months by the day of completion/ exchange? Is there a particular deadline for claiming? There are loads of info-threads on HTB ISA, but i don't seem to find when and how to claim for LISA at all.

You have to hold the LISA for at least one year before you can use it, with the bonus, for a house purchase.