HTB deposits need to come from an account in his name?

MSHN

My son has come to live at home and is working.
I have suggested that he opens a HTB ISA before 30th Nov.
Do the monthly deposits need to come from an account in his name?
I would prefer to pay them in from my account to ensure continuity.
Is this allowed?
Thank you.

Rich2808

As this thread suggests its best if you pay your son the funds first into another account – and then he transfers it in to the help to buy isa directly.

https://forums.moneysavingexpert.com/showthread.php?t=3241596

Might be easier if the savings account is with the same provider as the help to buy isa – ideally a bank or BS that allows easy online transfers between accounts.

There are obviously potential tax issues (e.g. inheritance tax if you die within 7 years of making the gift) but the sums involved with the HTB isa are minimal (i.e. a £1200 lump sum and £200 a month thereafter) so probably not worth worrying about.

Some providers (e.g. small building societies) may also require the first payment to be made by cheque – in the name of the account owner for ID purposes.

eskbanker

Rich2808 wrote: »

As this thread suggests its best if you pay your son the funds first into another account – and then he transfers it in to the help to buy isa directly.

https://forums.moneysavingexpert.com/showthread.php?t=3241596

I'm not sure that thread really does reach that conclusion - it seemed to be generally accepted that paying into a cash ISA by third-party bank transfer wouldn't be a problem but the lone dissenting voice (albeit a reputable one) suggested potential issues with cheque payments, especially to S&S ISAs.

The government guidance quoted there in 2011 remains the same now and is still ambiguous!

https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors#cash-subscriptions:

Investors can subscribe cash to each type of ISA. They must subscribe with their own cash, and this includes payment by cheque, direct debit, charge card, credit card, telegraphic transfer and standing order. Cash subscriptions from third parties can be accepted without question unless the ISA manager holds information that shows that the cash does not belong to the investor.

The view that 'cash' in the last sentence only refers to notes and coins doesn't really hold water IMHO, especially given the definition in the previous sentence, plus the fact that a later section allows cash subscriptions by employers....

masonic

It's best to check the T&Cs of the HTB ISA you are interested in opening. Some may have restrictions on where the money can come from or how it is transferred.

I would interpret the guidance quoted by eskbanker above to be wholly consistent: the money must belong to the investor, but that can include money given to them by way of a transfer into the ISA. What isn't allowed in is money that's merely lent to them or 'resting' in their account.