Returned interest after transferring into Skipton

rwcwilson

Hi all,

Bit of a weird one. I transferred my help to buy ISA and a LISA, from a Nutmeg stocks and shares account, into a Skipton LISA. I have not contributed at all to the help to buy ISA this tax year. I added the full £4,000 to the Nutmeg LISA in April 2017.

I had an e-mail from Skipton yesterday saying that they were returning funds to me as I have exceeded the annual LISA limit. Thought this was a bit odd so I've just rung them up. They said they had to return the interest accrued this year from the Help to Buy ISA, as it was seen as paying into the LISA this tax year.

It's only a small sum of money but just seems a bit odd; I wouldn't have thought they'd include the interest when its been earnt on an account where I haven't paid into this year.

Anyone have any ideas/had the same problem? I might well just be missing something obvious...

Many thanks

Alexland

This is totally correct and its nice to see Skipton are finally implementing the rules correctly.

rwcwilson

Alexland wrote: »

This is totally correct and its nice to see Skipton are finally implementing the rules correctly.

Can you explain please?

Alexland

rwcwilson wrote: »

Can you explain please?

Page 140 in the ISA Manager guidance - the HTB interest for this year was in excess of the amount at 5th April 2017 that could be transferred without it counting towards this year's LISA allowance.

https://www.gov.uk/government/publications/guidance-notes-for-isa-managers

9B.16 During 2017/18 tax year only, investors who are eligible to open a Lifetime ISA may make a single transfer of funds (including interest) up to the value built up in their Help to Buy ISA as at 5 April 2017 into a Lifetime ISA, without this amount counting towards the £4,000 Lifetime ISA payment limit. However, any such transfer must not breach the 'one Lifetime ISA per tax year' rule.

So because you deposited £4k into the LISA they would need to return the HTB interest for this year.

Alex

rwcwilson

Alexland wrote: »

Page 140 in the ISA Manager guidance - the HTB interest for this year was in excess of the amount at 5th April 2017 that could be transferred without it counting towards this year's LISA allowance.

https://www.gov.uk/government/publications/guidance-notes-for-isa-managers

9B.16 During 2017/18 tax year only, investors who are eligible to open a Lifetime ISA may make a single transfer of funds (including interest) up to the value built up in their Help to Buy ISA as at 5 April 2017 into a Lifetime ISA, without this amount counting towards the £4,000 Lifetime ISA payment limit. However, any such transfer must not breach the 'one Lifetime ISA per tax year' rule.

So because you deposited £4k into the LISA they would need to return the HTB interest for this year.

Alex

Many thanks!

Ed-1

rwcwilson wrote: »

Hi all,

Bit of a weird one. I transferred my help to buy ISA and a LISA, from a Nutmeg stocks and shares account, into a Skipton LISA. I have not contributed at all to the help to buy ISA this tax year. I added the full £4,000 to the Nutmeg LISA in April 2017.

I had an e-mail from Skipton yesterday saying that they were returning funds to me as I have exceeded the annual LISA limit. Thought this was a bit odd so I've just rung them up. They said they had to return the interest accrued this year from the Help to Buy ISA, as it was seen as paying into the LISA this tax year.

It's only a small sum of money but just seems a bit odd; I wouldn't have thought they'd include the interest when its been earnt on an account where I haven't paid into this year.

Anyone have any ideas/had the same problem? I might well just be missing something obvious...

Many thanks

Who was the H2B ISA with?

rwcwilson

Ed-1 wrote: »

Who was the H2B ISA with?

Nationwide

Ed-1

rwcwilson wrote: »

Nationwide

They're the only ones that seem to be providing a breakdown of interest to Skipton. Someone on another thread had their interest counted towards the ISA allowance and theirs was with Nationwide.