HTB transfer to LISA ,Old/New money.

moral_shopworker

I'll bullet point for ease!
Had Hallifax HTB and saved approx £1300  been sitting there for 2yrs untouched/or added to. (old money)
Opened a LISA to give greater spending power on 1st home as £250k wasn't going to cover a home in my area.
Have paid into LISA this tax year 20/21 , approx £3k, can still pay the £1k to max the annual amount of £4k by transferring £1k from my OLD money HTB.
I DO understand that I will only get the Gov bonus 25% on the LISA when I come to buy.
My old HTB becomes 'somewhat redundant' but still with a 2.25% interest rate, is there a legal reason why Halifax won't allow me to use remainder of my 'personal tax free allowance' £16k  and continue to pay into the 'old' HTB?  ( I read on here you could still take advantage of that £16k...(or not?)) 
Is it just their 'in house' t&c'? THEY say I can only pay into one ISA p.a. ....they KNOW it's a LISA , because I've requested to transfer the 1k to the LISA.
Is it because I've ALREADY deposited £3k THIS tax year in the LISA - surely not?? Not everyone has the other £16k to do at the same time - am I am missing something ?
I thought LISA runs on seperate rules to ISAs. ie  20k allowance..£4k to LISA and £16k to ISA.
Many Thanks.  

eskbanker

You can pay into both a HTB ISA and a LISA concurrently as they're different types of ISA - if you're looking to pay 2020/21 money into your HTB ISA then you need to declare that you won't be paying into another cash ISA this year but your LISA isn't a cash ISA, it's a separate type....

badger09

Have you spoken to Halifax, or just tried to do something?
There's obviously been a misunderstanding (and some of it could be mine) but there could be more than 1 issue here.

1: If your Halifax HTB ISA has been untouched for  2 years, Halifax will probably need you to reactivate it before you can pay anything in. It may be possible to do this online.

2: You seem to be suggesting that you should be allowed to pay £16k (£20k ISA allowance less £4k paid into LISA) into your Halifax HTB ISA. Obviously HTB rules allow max £200 pm, so you can't pay in £16k.

3: As HTB is a subset of Cash ISA, if you pay anything at all into it, you cannot also pay into another Cash ISA at the same time (unless you hold both with a provider of 'split' ISAs, like Nationwide).

moral_shopworker

badger09 said:

Have you spoken to Halifax, or just tried to do something?
There's obviously been a misunderstanding (and some of it could be mine) but there could be more than 1 issue here.

1: If your Halifax HTB ISA has been untouched for  2 years, Halifax will probably need you to reactivate it before you can pay anything in. It may be possible to do this online.

2: You seem to be suggesting that you should be allowed to pay £16k (£20k ISA allowance less £4k paid into LISA) into your Halifax HTB ISA. Obviously HTB rules allow max £200 pm, so you can't pay in £16k.

3: As HTB is a subset of Cash ISA, if you pay anything at all into it, you cannot also pay into another Cash ISA at the same time (unless you hold both with a provider of 'split' ISAs, like Nationwide).

Apologies... yes you are quite correct re the max amount per month, I did realise that but omitted it in trying to simplify! And yes spoke to Halifax and , didn't discuss the amount I wished to put in each month so no confusion had arisen in regards to that part. From what you have said am I to assume that it IS ok legally to pay into a subset Cash ISA (namely an HBT)  aswell as a LISA ...at the discretion of whichever bank's t&cs. Also , as far as 'reactivating'... it was still accruing interest, to me it suggests 'active'.  Thank you.  

moral_shopworker

eskbanker said:

You can pay into both a HTB ISA and a LISA concurrently as they're different types of ISA - if you're looking to pay 2020/21 money into your HTB ISA then you need to declare that you won't be paying into another cash ISA this year but your LISA isn't a cash ISA, it's a separate type....

Thank you! I expect you may have seen Badger09's reply - so between you I feel I have clarification..with a few tweaks! - that LEGALLY it is ok to do this!

eskbanker

moral_shopworker said:

eskbanker said:

You can pay into both a HTB ISA and a LISA concurrently as they're different types of ISA - if you're looking to pay 2020/21 money into your HTB ISA then you need to declare that you won't be paying into another cash ISA this year but your LISA isn't a cash ISA, it's a separate type....

Thank you! I expect you may have seen Badger09's reply - so between you I feel I have clarification..with a few tweaks! - that LEGALLY it is ok to do this!

Yes, you are allowed to pay into both, even if the employee you spoke to doesn't know the rules (they're not the first).

Regarding "as far as 'reactivating'... it was still accruing interest, to me it suggests 'active'", that's not really the test - whenever no deposits are made to an ISA throughout an entire tax year, the holder has to complete a brief declaration when looking to restart contributions....

moral_shopworker

eskbanker said:

moral_shopworker said:

eskbanker said:

You can pay into both a HTB ISA and a LISA concurrently as they're different types of ISA - if you're looking to pay 2020/21 money into your HTB ISA then you need to declare that you won't be paying into another cash ISA this year but your LISA isn't a cash ISA, it's a separate type....

Thank you! I expect you may have seen Badger09's reply - so between you I feel I have clarification..with a few tweaks! - that LEGALLY it is ok to do this!

Yes, you are allowed to pay into both, even if the employee you spoke to doesn't know the rules (they're not the first).

Regarding "as far as 'reactivating'... it was still accruing interest, to me it suggests 'active'", that's not really the test - whenever no deposits are made to an ISA throughout an entire tax year, the holder has to complete a brief declaration when looking to restart contributions....

Ok! Thank you! I will follow that up and keep saving!

badger09

As eskbanker says, if the Halifax employee doesn't know the rules, they won't be the first (or the last!)

Please update when you've managed to reactivate & subscribe (pay in) to your HTB ISA.