Moving Money from Santander Help2Buy into Plum LISA

CWals1297

Hi all, 

First post! Looking for some clarification about a move I'm looking to make. 
I have £11,600 in a help to buy ISA, and plan to move it all over to a Plum LISA over the next three tax years. 

Plum do not support transfers from Santander Help2Buy ISAs, and so here are my questions:
- Could I not manually make a payment into the LISA directly from the H2B account? 
- Would there be any tax or bonus implications if I did so? 

I believe I am tripping up over the differing uses of 'transfer' and 'payment', and worrying about whether the difference in language could result in any unforeseen negative outcomes. 

Any thoughts welcome!

eskbanker

The general advice is to use the ISA transfer process, but it can be sensible to withdraw and redeposit sometimes - how much use are you planning to make of your £20K annual ISA contribution allowance this year and the next two?

masonic

As alluded to above, the only implication is consumption of £4k out of your £20k annual allowance, which could be avoided using a formal ISA transfer. If this isn't a concern (as you won't use up the other £16k) then the manual route can be preferable.

Ch1ll1Phlakes

As above if you are ok with using £4k of your annual allowance each tax-year this is the simplest way to move the H2B funds.

Alternatively, if you really want to preserve your ISA allowance, you could transfer the £4k per tax-year to Skipton and then on to Plum. This is gonna be tedious as you have to do two ISA transfers per year. Just an option if you would use all of your ISA allowance in the next few tax-years.

CWals1297

eskbanker said:

The general advice is to use the ISA transfer process, but it can be sensible to withdraw and redeposit sometimes - how much use are you planning to make of your £20K annual ISA contribution allowance this year and the next two?

Hi! Thanks for this! 
My plan is stop contributing to my H2B altogether, with the view to make 3 payments over the next 3 tax years into the higher interest LISA, and then close the H2B. I will continue making the regular savings I would have placed into the H2B to a regular savings account (not an ISA, but also has a higher interest rate than the H2B). With this in mind (and if I've done the right mapping), I shouldn't come near the maximum contribution allowance.

CWals1297

masonic said:

As alluded to above, the only implication is consumption of £4k out of your £20k annual allowance, which could be avoided using a formal ISA transfer. If this isn't a concern (as you won't use up the other £16k) then the manual route can be preferable.

Thanks for this! It looks as if it will be a reasonable route 

Ch1ll1Phlakes

CWals1297 said:

eskbanker said:

The general advice is to use the ISA transfer process, but it can be sensible to withdraw and redeposit sometimes - how much use are you planning to make of your £20K annual ISA contribution allowance this year and the next two?

Hi! Thanks for this! 
My plan is stop contributing to my H2B altogether, with the view to make 3 payments over the next 3 tax years into the higher interest LISA, and then close the H2B. I will continue making the regular savings I would have placed into the H2B to a regular savings account (not an ISA, but also has a higher interest rate than the H2B). With this in mind (and if I've done the right mapping), I shouldn't come near the maximum contribution allowance.

Sounds like a reasonable plan when H2B interest rates are poor at best.