Government denied my Help-To-Buy ISA bonus... any comeback?

mercutick

Hello, I was hoping to get some advice. In June I completed the purchase of my first home. I had opened a government-backed Help-To-Buy ISA in 2017 which as you all know was meant to provide me with a 25% bonus on my savings to that point towards the purchase price of the property. I had opened the account with Nationwide bank and had been contributing to it each month. I was set to be entitled to a bonus of around £800.

When the sale of the property was finalised the government scheme refused the bonus as it was deemed that I had breached the terms of the ISA by having another ISA account open at the same time. I refuted this and it turns out I did have another ISA account open with Halifax, which I must have opened in 2015 but had never done anything with it and completely forgotten about. I am sure that I had instructed it to be closed and had not contributed any money to in over two years, but Halifax had apparantly never closed it and it sat there empty all this time.

Now, I know that I should be more on top of my finances and should have been aware that I had the account sitting open but I would like to know whether I have grounds for complaint proceedings with Halifax and entitled to compensation for them not closing that old account (if I can prove I did indeed instruct it) and also angry that no-one at any point informed me that I had an existing ISA open when I went to open one with Nationwide. I do not know whether I would have a claim against either bank for not fully advising me, surely something should be flagged up to say this person has an existing ISA already? Or whether I would have a case for appeal against the government decision which is unfairly withholding my bonus. The government are supposed to be helping first-time-buyers, not finding loop-holes to get out of their obligations.

I understand that this is in their terms and conditions and will accept this as an expensive lesson learned if I have no recourse but as a young person trying to navigate the purchase of their first home there was so much I didn't fully understand and it was a long, confusing process, I guess I was just hoping there'd be more help available and someone would have informed me. £800 is a very significant sum of money for me and I was really counting on that bonus so any helpful advice would be appreciated.

eskbanker

That could do with some paragraph breaks for legibility but there is nothing to stop you opening a HTB ISA in 2017 if you have a separate cash ISA open, provided you didn't contribute to both in the same tax year. What exactly does the bonus rejection notification say?

wjr4

So you have two Help to Buy ISAs. Nationwide will not look to see if you already have one open, that is your job. Halifax should have closed it but then you cannot open another Help to Buy ISA anyway as you had already opened one. You should have put money in Halifax and then transferred it to Nationwide. Personally, I don't think either provider will offer you compensation as it is your mistake.

Alexland

eskbanker wrote: »

That could do with some paragraph breaks for legibility

AtLeastTheOPUsedSpacesBetweenWords

mercutick

"Good Morning,

Thank you for contacting the Help to Buy: ISA Scheme.

I have investigated your query and can confirm in the Scheme Rules section 5.3A dictates that an Eligible Customer shall only be entitled to open (and hold) one Help to Buy: ISA at any time. An Eligible Customer shall not be restricted from opening a Help to Buy: ISA if that Eligible Customer has previously held a Help to Buy: ISA, provided that any previously held Help to Buy: ISA is no longer open.

Unfortunately, as detailed above the Help to Buy: ISA account does not comply with the Scheme Rules therefore, your client is not eligible for the bonus payment.

The above information can be found by yourself in the Scheme Rules which can be located on the website.

Please also note that prior to rejecting the bonus request we had sought confirmation from your clients ISA provider, in which it was confirmed that the first account is still open. The ISA provider also confirmed that they had not received a request for account closure.

I appreciate this may not be the response you were hoping for, however I believe this information clarifies the situation. Please do not hesitate to contact us should you require any further assistance.

Kind Regards

UKARcs

Administrator of the Help to Buy: ISA Scheme"

eskbanker

Ah right, I hadn't picked up from your references to 'another ISA' that you had two Help To Buy ISAs, which is indeed a no-no.

Did you ever pay any money, even £1, into the Halifax one? As I recall, the HMRC ISA rules state that an ISA is only technically regarded as open once it's been funded....

mercutick

Yes, I am sure I had done back in 2015 or but transferred the balance out and emptied it shortly after.

eskbanker

In which case you don't have any sort of case with either Nationwide or the government, but if you can prove (via some sort of acknowledged request) that you instructed Halifax to close the original account, then that might be an angle to pursue, but even then it's a long shot, as they presumably wouldn't ever have confirmed closure back to you?

Westie983

eskbanker wrote: »

In which case you don't have any sort of case with either Nationwide or the government, but if you can prove (via some sort of acknowledged request) that you instructed Halifax to close the original account, then that might be an angle to pursue, but even then it's a long shot, as they presumably wouldn't ever have confirmed closure back to you?

When Help 2 Buy ISA's are closed you are given the forms to hand to the solicitors and any remaining funds from the account and a closing statement is sent to the holders address and your get a copy again at the end of the tax year if you have had an ISA opened during the tax year.

OP did you not get any paperwork from the Halifax each year even if it was opened with no funds?

Westie983

alandaniel132

so you mean you have 2 Help to Buy ISA in Halifax (not close yet) and one in Nationwide which is active?

2 Help to Buy ISA?

alandaniel132

so you mean you have 2 Help to Buy ISA in Halifax (not close yet) and one in Nationwide which is active?

2 Help to Buy ISA?