LISA loophole

wanderlust23

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?

eskbanker

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....

wanderlust23

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.

wanderlust23

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

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?

realaledrinker

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.

wanderlust23

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

wanderlust23 wrote: »

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

Thank you for your help, Skipton have now rectified this issue (and thankfully just in time for the new tax year!)