Help to Buy Isa and CTF

Natbells

Hello Everyone,

Quick question - Am I able to transfer my son's Child Trust Fund over to a Help to Buy Isa when he turns 16 in November?

No one seems to be able to advise me!

Thank you

bowlhead99

Your son's money can't be taken out of the CTF until he is 18, assuming he's not terminally ill.

You (or your son, only once he turns 16 and is legally allowed to control the account) could convert it into a Junior ISA if you like, although the money still can't be taken out to spend or to put into a HTB, until he's 18. However, when he turns 18 the junior ISA would automatically convert into an adult ISA and could be transferred (or partially transferred, depending on the amount of money involved) into a help to buy ISA account.

In the meantime there is nothing to stop you using some other money to open the Help To Buy ISA in his name, as he is old enough to have one... he's just not old enough to get the money out of the CTF / JISA.

Depending on his plans for the money and the amounts involved, at age 18 you or he might decide that the Lifetime ISA is more useful than the HTB ISA, but I suppose that's a different question entirely.

Flobberchops

bowlhead99 wrote: »

Depending on his plans for the money and the amounts involved, at age 18 you or he might decide that the Lifetime ISA is more useful than the HTB ISA, but I suppose that's a different question entirely.

In two years it'll be a moot point as Help To Buy ISAs are closing for new customers at the end of November this year.


I'm honestly not sure, but would it not be possible to convert the CTF to a JISA, and then transfer-in to a HTB ISA? As you say though, OP can just plough on and open the HTB alongside whatever else their son has, as between 16 and 18 they can hold both child and adult products.

Wildsound

HTB ISAs are bound by their own initial contribution and ongoing £200 pm limits. So no you couldn't

bowlhead99

Flobberchops wrote: »

In two years it'll be a moot point as Help To Buy ISAs are closing for new customers at the end of November this year.

True, I wasn't thinking straight there. It won't be possible to transfer any of the contents into a HTB at age 18 if he hasn't already got one - i.e. he'd need to act to get himself an HTB in November this year, separate from his CTF or JISA, before they're withdrawn from sale.

The main option when he turns 18 and wants to put some of the money coming out of his CTF or JISA towards a house deposit with some government bonus (assuming no new products introduced in next couple of years) will be to put it into a LISA (subject to the contribution limits of that scheme). That's because the HTB will only be an option if he already has an HTB account that he opened November this year; and if he did open a HTB this year, then by 2021 he'll be restricted to putting only £200 per month into it which is a much lower limit than the LISA would be able to take.

I'm honestly not sure, but would it not be possible to convert the CTF to a JISA, and then transfer-in to a HTB ISA?

No because you can't transfer-out of a JISA to anything other than another JISA (cash JISA or investment JISA) when you're under 18, and nor can you use it for collateral as a loan to try to get your hands on the money by the back door. The JISA, like the CTF, was designed not to give access to the cash before 18.

Only once the JISA automatically rolls over into an Adult ISA on the 18th birthday does it become eligible to transfer to other (non JISA) ISA types.

As you say though, OP can just plough on and open the HTB alongside whatever else their son has, as between 16 and 18 they can hold both child and adult products.

Yes, that seems to be the way forward if you really want a HTB ISA (and do it in November before the product is withdrawn for new customers)