6k+ Help to buy ISA transfer to LISA

Leedslad8t6

Never mind i found it, thank you all for your help.

wish me luck xD

Danny

Ed-1

Leedslad8t6 wrote: »

Do you know if there's an option to limit the amount you transfer as if it swallows the whole account I will go over the 4k LISA limit

aj23_2

See here https://forums.moneysavingexpert.com/discussion/5801017

If you've already put £4,000 in the LISA in this tax year, you wouldn't be allow to top that up, as this years contributions to your HTB would count toward it. So if you've put £2,200 in the HTB in this tax year, you'd have to leave that in the HTB account and not close it. You'd be able to transfer the remaining £3,800 into the LISA from the previous tax years and would receive 25% bonus on that, as well as your £4,000 LISA contribution this year.

Basically, you can only transfer into your LISA from your HTB in this tax year from what you have already paid in in this tax year. So if you've already filled your contribution for the LISA, then you've already reached it.

aj23_2

Leedslad8t6 wrote: »

I have been paying in the full amount every month so £200 since the start of the financial year (about £2400 I think).

Am I right in thinking I can transfer the balance of the HTB before this financial year into the LISA and still keep the HTB ISA open?

Yes, this is right. You can expect to get about £800 extra bonus from your 2015/16 tax year and 2016/17 tax year contributions combined. So you would get a 25% bonus payment in April from HMRC on a balance of £7,800 or so (your non-2017/18 HTB contribution and your current LISA contribution)

As you're already getting 3.5% (Halifax, right?) You would get about £800 in interest over the next 3 years by leaving your HTB ISA as it is and not transferring it. So depends if you want that paid out in pump in April as a bonus, or willing to accumulate it over three years in interest (and rates are likely to go up, too). And if you're planning on buying in under 3 years, it might be worth transferring to get the net gain.

Bare in mind that Halifax lets you deposit more than the £12,000 bonus redeem limit in the account, so 3-5 years of building up your HTB from now would actually see you earn more in interest (about £1400) so you'd be better off leaving it if you're planning in buying in say 4 or 5 years (and you can keep depositing until 2030, unless you buy a house, in which you'd have to close it straight away as you'd no longer be eligible)

This is why I am in dilemma as to transfer or not, as my HTB is paying 4%. So do I transfer and get the £820 extra bonus in April, or wait 2 and a half years to get it through interest. However, over the next 5 years it will pay me £1500 in interest at current 4%, so I'd be better of leaving it long term. Also, your HTB is easy access, your LISA is not, so weigh up if you think you may need emergency money for any circumstance. I think I am leaning toward not transferring, because it would mean that 70% of my money is in restricted accounts, and I kind of want to keep the HTB open because of the interest rate which is likely to go up.

Leedslad8t6

So my understanding was that I could only add last tax years contributions. I worked this out and then sent the form off requesting my HTB still be left open.

It worked out around £3886 for last tax year, they have reduced the amount I get on the HTB isa before so I believe i'm better off getting the 25% bonus.

I know its locked away but i'm running out of risk free places to gain interest and will be buying a house within the next few years.

Am I right in thinking that the £4,000 LISA allowance per year is split between the HTB and the LISA then?

Danny

ValiantSon

Leedslad8t6 wrote: »

So my understanding was that I could only add last tax years contributions. I worked this out and then sent the form off requesting my HTB still be left open.

It worked out around £3886 for last tax year, they have reduced the amount I get on the HTB isa before so I believe i'm better off getting the 25% bonus.

I know its locked away but i'm running out of risk free places to gain interest and will be buying a house within the next few years.

Am I right in thinking that the £4,000 LISA allowance per year is split between the HTB and the LISA then?

Danny

No, your £4,000 LISA limit is just for LISAs. The HTB has its own limit.

tripled

I have applied to transfer my Help To Buy ISA balance as of 4th April 2017, plus interest paid in Dec 17, to the LISA (so not transferring the contributions made in this tax year). I will also pay £4k into the LISA. This should give me close to the maximum possible bonus for this year (losing a few pounds bonus for not closing the HTB account and so transferring the three month's interest earned between December and March).

I am keeping the HTB ISA open with this year's contributions and continuing to pay in £200 p/m because of the high interest rate (3.5%), so basically just using it as a cash ISA.