Help To Buy ISA

Haylz.Moore

Bear with me, this is a little long-winded to get to one question! 😅

I've had the Help To Buy ISA for an extremely long time! I still haven't been able to buy my first home & have filled up the ISA well above the amount needed to get the full bonus. As you can only pay into one ISA per tax year I've kept paying in the limited £200p/m. But it's got to the point that in the time I've had this ISA, I could have earnt the £3000 bonus in interest alone, elsewhere, had I been able to pay in more than the measly £200p/m.

And on that fact, I've decided I'm going to transfer the ISA out & lose the bonus. I've read over Martin's top HTB tips & he states that you can in-fact close one ISA fully & pay into a second in the same tax year (providing you don't exceed the £20,000 allowance), to quote "a little-known exception to the rule is that you're allowed to pay into a second (but no more), provided you've fully closed the first, not just emptied it" (See point 9 on the Help to Buy ISA section)

So really, I'm just looking for confirmation that I've read this right & can go ahead? 

I already have another cash ISA (it was a transfer & has not been funded this tax year) so I'm essentially looking to transfer my HTB ISA into this one & continue paying into it (up to the allowance). Meaning the HTB ISA will be fully closed before I start paying into my other ISA, just as Martin stated. Have I got that right? 😅

eskbanker

The ‘Investor error’ ISA self transfer section at https://www.gov.uk/guidance/close-void-or-repair-an-isa-if-youre-an-isa-manager#repair-void explains the exemption in detail.

However, I'd take stock and evaluate whether you'd really be earning enough interest to warrant using a standard cash ISA, versus continuing with the HTB and putting your other savings into taxable accounts, where the overall net return may still justify that approach?

Alternatively, if you haven't already, it would be worth considering a Lifetime ISA for saving towards a first property deposit - it's also limited, to £4K per year, but offers an uncapped 25% government bonus.