Transferring a help to buy ISA to a stocks and shares ISA

AA-Audrey

My niece (age 20) wishes to transfer her help to buy ISA into a LISA. It currently holds about 6k. 
Can anyone explain the benefit of transferring as opposed to simply withdrawing the money  and then opening a LISA. (I know there is an ISA limit but that’s not relevant here due to the small amounts) I ask this because not all providers will accept a transfer so it limits her choices somewhat.

I did read the following on  an old Money saving expert post from 2016 which could explain the reason to transfer. Not sure if it’s still applicable 

• The impact on your LISA allowance of transferring a Help to Buy ISA in depends on when you contributed. All money contributed to a Help to Buy ISA before LISAs launched (ie, before 6 April 2017) can be transferred in without affecting your LISA allowance – and you can get both the max £1,000 LISA bonus, plus the bonus on that Help to Buy ISA cash on top. Any money you contribute to the Help to Buy ISA after LISAs launch however will eat up your LISA allowance.

eskbanker

AA-Audrey said:

My niece (age 20) wishes to transfer her help to buy ISA into a LISA. It currently holds about 6k. 
Can anyone explain the benefit of transferring as opposed to simply withdrawing the money  and then opening a LISA. (I know there is an ISA limit but that’s not relevant here due to the small amounts) I ask this because not all providers will accept a transfer so it limits her choices somewhat.

I did read the following on  an old Money saving expert post from 2016 which could explain the reason to transfer. Not sure if it’s still applicable 

• The impact on your LISA allowance of transferring a Help to Buy ISA in depends on when you contributed. All money contributed to a Help to Buy ISA before LISAs launched (ie, before 6 April 2017) can be transferred in without affecting your LISA allowance – and you can get both the max £1,000 LISA bonus, plus the bonus on that Help to Buy ISA cash on top. Any money you contribute to the Help to Buy ISA after LISAs launch however will eat up your LISA allowance.

The benefit of transferring is that it doesn't eat into the current year £20K ISA allowance, but if she's unlikely to use all of that then it isn't a particularly compelling reason - however, as stated in the last sentence, either way round she can only get £4K into the LISA in any tax year so would need to stagger the move across two tax years.

It would be more conventional to move funds from a HTB ISA into a cash LISA, as this is less likely to lose value leading up to a first property purchase - how far away would she see her purchase being?

AA-Audrey

Not for many years (at least 5 most likely 10 or more), hence why I thought a stocks and shares lisa would be better.
I will do some research on cash Lisa’s 

Albermarle

AA-Audrey said:

Not for many years (at least 5 most likely 10 or more), hence why I thought a stocks and shares lisa would be better.
I will do some research on cash Lisa’s 

If you are probably looking at 7 years + then best to stick to the S&S Lisa. At 5 years it is a bit more 50:50.