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LISA loophole

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Hi all

I opened a H2B ISA just before the end of the tax year 17/18 and transferred in £1200 and £200 every month thereafter. I have recently transferred the H2B ISA to a LISA and topped the LISA up to £4000. However I was reading about a loophole that allows the bonus to also be paid on ISA contributions prior to this current tax year. Does that mean I can transfer in an extra £1200?

Comments

  • eskbanker
    eskbanker Posts: 37,059 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The 'loophole' (MSE love using that term!) was that HTB ISA contributions made before 5 April 2017 didn't count towards the £4K annual LISA allowance when being transferred during 17/18.

    When did you open your HTB? You say it was just before the end of 17/18 but we haven't even reached the end of 17/18 yet and it sounds more like you may have meant 16/17?

    Your HTB closing statement should show how much of your balance related to 16/17 versus 17/18, and your LISA provider should also display how much (if any) of your 17/18 allowance you have left....
  • eskbanker wrote: »
    The 'loophole' (MSE love using that term!) was that HTB ISA contributions made before 5 April 2017 didn't count towards the £4K annual LISA allowance when being transferred during 17/18.

    When did you open your HTB? You say it was just before the end of 17/18 but we haven't even reached the end of 17/18 yet and it sounds more like you may have meant 16/17?

    Your HTB closing statement should show how much of your balance related to 16/17 versus 17/18, and your LISA provider should also display how much (if any) of your 17/18 allowance you have left....
    Yes apologies I meant 16/17. I haven't received a closing statement, I will chase the bank for it. Thanks for your reply.
  • I have confirmed with my bank that I opened the H2B account in March 2017 and deposited £1200 in that same month. However, when I log into my Skipton account it says 'Deposits are no longer possible into this account.'

    Am I missing something?
  • eskbanker
    eskbanker Posts: 37,059 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Did you transfer your HTB in its entirety (i.e. 16/17 and 17/18 money) into the LISA by following the Skipton transfer process, and did you get this started before the 1 March deadline?
  • I transferred both my kids' HFX HTB ISAs to Skipton and based on experience they are not immune to cocque ups regarding current year subs. A bit late now to do anything about it.
    Ethical moneysaver
  • eskbanker wrote: »
    Did you transfer your HTB in its entirety (i.e. 16/17 and 17/18 money) into the LISA by following the Skipton transfer process, and did you get this started before the 1 March deadline?
    Yes to both
  • eskbanker
    eskbanker Posts: 37,059 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Yes to both
    If you had £1200 of 16/17 money in your HTB and £2400 of 17/18 money, then it's only the latter (plus interest) that counts towards your 17/18 LISA allowance, you should be able to add something like another £1550 before the end of the tax year on Thursday, giving you a year-end balance of about £5200.

    If you "topped the LISA up to £4000" and Skipton won't let you pay more in to take it up to £5200 then it would appear that they haven't taken account of the fact that £1200 of your balance related to 16/17 and therefore doesn't count towards the 17/18 £4K LISA limit.

    Complain as a matter of urgency, making it clear that the issue needs to be sorted by Thursday!
  • wanderlust23
    wanderlust23 Posts: 144 Forumite
    Thank you for your help, Skipton have now rectified this issue (and thankfully just in time for the new tax year!)
This discussion has been closed.
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