Query about H2B ISA to LISA transfer

grumiofoundation

thaddy said:

I transferred my savings from a Help to Buy ISA into a lifetime ISA as I believe you can't fund both ISAs in one financial year. I'm not sure what happens if you have more than £4000 in your Help to Buy ISA though so you may need to check that with Moneybox before doing the transfer. 

This isn’t correct. 

You can pay into one of each of the 4 types of ISA each year.
- Cash (includes HTB) 
- Lifetime (whether cash or stocks and shares) 
- stocks and shares 
- innovative finance

https://www.gov.uk/individual-savings-accounts

thaddy

grumiofoundation said:

thaddy said:

I transferred my savings from a Help to Buy ISA into a lifetime ISA as I believe you can't fund both ISAs in one financial year. I'm not sure what happens if you have more than £4000 in your Help to Buy ISA though so you may need to check that with Moneybox before doing the transfer. 

This isn’t correct. 

You can pay into one of each of the 4 types of ISA each year.
- Cash (includes HTB) 
- Lifetime (whether cash or stocks and shares) 
- stocks and shares 
- innovative finance

https://www.gov.uk/individual-savings-accounts

Thanks for the information I would have thought 'Help to Buy and Lifetime ISA' where under the same category so it might be worth confirming that the ISA manager has the same understanding before proceeding

eskbanker

thaddy said:

grumiofoundation said:

thaddy said:

I transferred my savings from a Help to Buy ISA into a lifetime ISA as I believe you can't fund both ISAs in one financial year. I'm not sure what happens if you have more than £4000 in your Help to Buy ISA though so you may need to check that with Moneybox before doing the transfer. 

This isn’t correct. 

You can pay into one of each of the 4 types of ISA each year.
- Cash (includes HTB) 
- Lifetime (whether cash or stocks and shares) 
- stocks and shares 
- innovative finance

https://www.gov.uk/individual-savings-accounts

Thanks for the information I would have thought 'Help to Buy and Lifetime ISA' where under the same category so it might be worth confirming that the ISA manager has the same understanding before proceeding

You may have thought that but you're wrong if you did and there is no need for anyone to confirm anything as it's perfectly clear that they're different types!

paulc67

My daughter has a HTB ISA she has been unable to utilise because her first home purchase exceeded the price limit. Does it make sense to transfer the saved amount into a LISA and would there be any carry over of the tax benefits? Or are we looking at a simple cashing out and re-investing towards her pension - I'm aware she can't access until age 60.

eskbanker

paulc67 said:

My daughter has a HTB ISA she has been unable to utilise because her first home purchase exceeded the price limit. Does it make sense to transfer the saved amount into a LISA and would there be any carry over of the tax benefits? Or are we looking at a simple cashing out and re-investing towards her pension - I'm aware she can't access until age 60.

Any transfer from one ISA to another preserves the tax benefits - https://www.moneysavingexpert.com/savings/lifetime-isas/#pension-2 summarises whether or not it makes more sense to use a LISA or a pension, which varies depending on a range of circumstances.

Alexland

If she is now a homeowner she is no longer eligible to hold the HTB ISA so it would need to be withdrawn or transferred to another type of ISA however in both circumstances she would not be eligible to claim the HTB ISA bonus. As above if she is looking to invest for retirement then it really depends on her circumstances on if making Lifetime ISA contributions would be better or worse than making additional pension contributions. This needs considering separately to any historic thoughts about the old HTB ISA. If she is looking to transfer money into a Lifetime ISA then the limit would still be £4k per tax year regardless of the size of the existing ISA.