H2B Isa to Lisa bonus query

foreversummer

Hi

My son is thinking of transferring his H2B to a Lisa.

After this year April 2018, the bonus is going to be paid monthly apparently. So what happens if you deposit the full £4000 at the beginning of the tax year, start to receive your monthly bonus and then decide to buy six months down the line. If you buy say in October you will have only received half you bonus, ie £500. Will they add the rest when you withdraw to buy, or will they diddle you out of the other £500?

Anyone know how this is going to work.

Cash-Strapped.T32

Well you've kind of answered your own question already - if the bonus is paid monthly, then about a month after you've paid in, you'll have all the bonus due to you.

For this year only - financial yr 17-18, whatever you put into the LISA will be topped up by 25% 4 to 8wks after the end of the financial year, which is Apr '18.

As you've already picked up on, after April '18, it will be 4-8 wks after each deposit is made.

So therefore say your son puts in X-amount now, he'll get and additional 25% of X in say, May or June.

After that, whenever he puts money in, HMRC will desposit 25% of however much he put in, 4-8 wks later - be it July, October or December, or the year 2025.

So there will be no situation where he'll only be getting half his bonus because he's half-way though the year; he'll have got all the bonus due to him a month or two after he paid in whatever amount he's paying in.

foreversummer

Thank you so much.

Oh I got it. A bit like when you get your pension tax relief added to your pension - I get it now.

Just a couple of other questions he has. He has been paying into his H2B for quite a few years now, including the 2017/18 tax year. He would like to transfer and top up to the £4000 for this current year, but he is not very good at keeping his statements in order. Is there an easy way of working out how much he has contributed 2017/18 so he can work out how much more he can put it?

Oh and one other one, I've read about keeping the old H2B Isa open to take advantage of the interest rate and for surplus funds, but doesn't this mean he will be contributing to two Isas in one year? I didn't think that was allowed. The Halifax has an interest rate of 3.5% so not bad and we realise no further bonus will be paid.

Foreversummer

ACCA

foreversummer wrote: »

Thank you so much.

Oh I got it. A bit like when you get your pension tax relief added to your pension - I get it now.

Just a couple of other questions he has. He has been paying into his H2B for quite a few years now, including the 2017/18 tax year. He would like to transfer and top up to the £4000 for this current year, but he is not very good at keeping his statements in order. Is there an easy way of working out how much he has contributed 2017/18 so he can work out how much more he can put it?

Oh and one other one, I've read about keeping the old H2B Isa open to take advantage of the interest rate and for surplus funds, but doesn't this mean he will be contributing to two Isas in one year? I didn't think that was allowed. The Halifax has an interest rate of 3.5% so not bad and we realise no further bonus will be paid.

Foreversummer

Can you login into the online banking where HTB ISA is held? Other option - maybe call the bank and ask this?

ValiantSon

foreversummer wrote: »

Thank you so much.

Oh I got it. A bit like when you get your pension tax relief added to your pension - I get it now.

Just a couple of other questions he has. He has been paying into his H2B for quite a few years now, including the 2017/18 tax year. He would like to transfer and top up to the £4000 for this current year, but he is not very good at keeping his statements in order. Is there an easy way of working out how much he has contributed 2017/18 so he can work out how much more he can put it?

If he transfers in to a LISA before the end of this tax year then he can also contribute the full £4000 in the LISA in addition to the sum transferred and get the bonus on all of it.

foreversummer wrote: »

Oh and one other one, I've read about keeping the old H2B Isa open to take advantage of the interest rate and for surplus funds, but doesn't this mean he will be contributing to two Isas in one year? I didn't think that was allowed. The Halifax has an interest rate of 3.5% so not bad and we realise no further bonus will be paid.

Foreversummer

Help to Buy is a type of cash ISA. You can pay into a cash ISA and a LISA in the same year.

eskbanker

ValiantSon wrote: »

If he transfers in to a LISA before the end of this tax year then he can also contribute the full £4000 in the LISA in addition to the sum transferred and get the bonus on all of it.

....but given that he's made payments to his HTB during this tax year, those (unlike prior year HTB contributions) will count towards the £4K LISA limit on transferring so he can't pay another full £4K in over and above the HTB transfer, at least not until after 6 April.

ValiantSon

eskbanker wrote: »

....but given that he's made payments to his HTB during this tax year, those (unlike prior year HTB contributions) will count towards the £4K LISA limit on transferring so he can't pay another full £4K in over and above the HTB transfer, at least not until after 6 April.

Yes. Sorry if I wasn't clear.

foreversummer

Thank you all for your help in clarifying for us.

Much appreciated

Foreversummer:beer: