LISA Transfer and per-year allowance

m567

I have triggered a LISA transfer from a old provider to a new provider. The old balance > 4000. I have saved 0 during this tax year.
The new one tells me that because the old balance is >4000, I cannot save anything from the 4000 into this tax year after transfer.

This sounds rubbish to me.

Thoughts?

eskbanker

Sounds rubbish to me too, assuming you've invoked the new provider's ISA transfer process - which ones are you referring to?

m567

MoneyBox as found here on moneysaving expert.  what to do? Who can inform about the actual law on this?
The FCA?

eskbanker

The rules are clear - you can pay up to £4K into a LISA in a tax year, as long as doing so doesn't breach the overall £20K annual ISA allowance, so if you haven't contributed to your LISA this tax year (and still have headroom overall) then there isn't any reason why you can't pay in £4K after a transfer consisting solely of prior year money.

If Moneybox are being awkward, is it too late to pay in this year's allowance before the transfer?

george4064

Are you sure you have requested to transfer your LISA, as per the ‘official’ process and not doing it manually yourself, hence using up your tax allowance?

It’s odd, as Moneybox are responding to your As as though you are using up your allowance as part of this transfer.

I’d contact them as soon as possible, explaining the situation and importantly highlighting that since you are transferring your LISA which was subscribed from previous tax years, you therefore are able to add a further £4k of new money for this tax year.

As a last resort, you could open a new LISA with another provider and add the £4k of new money there… buying you more time to sort it out with MoneyBox, cancel the transfer or if too late transfer away from them!

m567

Here is the msg from MoneyBox:  They italic the relevant sentence.  
Can anyone point to government rules (perhaps on a website) that I can come back to Moneybox with?

"I have now processed your transfer form and sent this along to your existing provider. Providers have up to 30 days to complete the transfer, however this is a guideline, and may vary depending on their volumes.
Please note that once your provider has sent the funds, these can take 3-5 working days to reach us.
Please note that your transfer will count towards your £4000 LISA allowance for this tax year. Please do not make any additional deposits from your linked bank account if you plan to max out your contributions, as this will cause you to go over your allowance."

and the older provider texted me "Thanks for Lifetime ISA Transfer request. For security confirm you want to go ahead plz send us webchat"

what to do?

eskbanker

I think I'd respond to Moneybox along the lines of "if you consider that transferring should be measured against the current tax year contribution allowance, then why are you allowing me to transfer more than £4K?"!

In terms of citations, try https://www.gov.uk/guidance/managing-lifetime-isa-applications-and-accounts#how-people-pay-into-their-lifetime-isa

Current year payments do not include:

• [...]
• cash or investments transferred between 2 Lifetime ISA accounts

FB13

m567 said:

Here is the msg from MoneyBox:  They italic the relevant sentence.  
Can anyone point to government rules (perhaps on a website) that I can come back to Moneybox with?

"I have now processed your transfer form and sent this along to your existing provider. Providers have up to 30 days to complete the transfer, however this is a guideline, and may vary depending on their volumes.
Please note that once your provider has sent the funds, these can take 3-5 working days to reach us.
Please note that your transfer will count towards your £4000 LISA allowance for this tax year. Please do not make any additional deposits from your linked bank account if you plan to max out your contributions, as this will cause you to go over your allowance."

and the older provider texted me "Thanks for Lifetime ISA Transfer request. For security confirm you want to go ahead plz send us webchat"

what to do?

I’m in the middle of transferring £4000 from my HTB ISA to a Moneybox Lisa. They sent me the exact same message (although it is correct in my case). I think it’s just a standard text that their customer service agents copy and paste. 

Moneybox has two different transfer forms. Did you fill out the correct one? 

m567

Yes I filled out the correct Lifetime ISA transfer form

m567

eskbanker I've emailed them that link and let's see what they reply.

m567

excellent, they accepted to the pointed out gov uk details and admitted their error. thanks folks, proceeding.