Lifetime ISAs guide
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I did get told the same as you NevvyC - that current years subscriptions PLUS INTEREST CREDITED reduce what you can pay into the LISA.
In practice, they don't seem to be applying it. I've asked over the phone for my limit, and it matches what it lets me deposit online - £3,500 is blocked as over limit - I'm still allowed to contribute £3,499 exactly before the end of the tax year.
My contributions this year have been £501 (£1 Skipton, £400 HTB ISA, £100 Nutmeg Investment LISA), but I've had about £7 interest/investment income.
So going by what they told me, I actually only have something like £3492 remaining - but Skipton's call centre and their website seem to tell me otherwise! As £3,500 is blocked, they clearly know I've made £501 of deposits - even though they received something like £101 from Nutmeg and an odd amount from the H2B ISA (including prior year subscriptions).
Also if investment had been in something that had rocketed in value, deducting the interest/investment income analogy that Skipton are saying would mean you breach the limit anyway. If I'd stuck £3,500 in Nutmeg Investment ONLY, that had then grown to £4,500... that's just good planning/investing on my side, I should still be allowed my £500 extra in.
At the end of the day they're the financial institution not you - IMO ask them what your remaining limit is and go by that. If it's wrong, they should take the rap from HMRC not us!0 -
Somerset_La_La_La wrote: »I did get told the same as you NevvyC - that current years subscriptions PLUS INTEREST CREDITED reduce what you can pay into the LISA.
In practice, they don't seem to be applying it. I've asked over the phone for my limit, and it matches what it lets me deposit online - £3,500 is blocked as over limit - I'm still allowed to contribute £3,499 exactly before the end of the tax year.
My contributions this year have been £501 (£1 Skipton, £400 HTB ISA, £100 Nutmeg Investment LISA), but I've had about £7 interest/investment income.
So going by what they told me, I actually only have something like £3492 remaining - but Skipton's call centre and their website seem to tell me otherwise! As £3,500 is blocked, they clearly know I've made £501 of deposits - even though they received something like £101 from Nutmeg and an odd amount from the H2B ISA (including prior year subscriptions).
Also if investment had been in something that had rocketed in value, deducting the interest/investment income analogy that Skipton are saying would mean you breach the limit anyway. If I'd stuck £3,500 in Nutmeg Investment ONLY, that had then grown to £4,500... that's just good planning/investing on my side, I should still be allowed my £500 extra in.
At the end of the day they're the financial institution not you - IMO ask them what your remaining limit is and go by that. If it's wrong, they should take the rap from HMRC not us!
Interest accrued within a LISA obviously doesn't count against the limit. It's the one-off transfer from a H2B ISA where there's ambiguity. But after this tax year that will be gone - all money transferred into a LISA from a non-LISA will count against the limit.0 -
I put £4000 into a LISA in April last year, it is now worth £4200. I wish to remove it from the LISA wrapper and put it into a normal ISA wrapper.
Can I transfer the LISA to my ISA provider with the £200 included or do I cash the LISA out to my bank and then deposit £4000 into the ISA? It looks like the ISA provider won't let me add £4200 as it says I only have 4000 allowance remaining (although I have used this on another provider for the LISA).
Thanks.
Edit: The provider I have the ISA with don't offer a LISA and I want the LISA to lose it's LISA wrapper and become a standard ISA.0 -
In theory you should be able to ask your other ISA provider to transfer the whole LISA into your ISA. However they may not have processes to do this.
If they don't do this by the end of this tax year on 5th April then the LISA withdrawal penalty would apply and get deducted from the transfer value.
The other option is to withdraw the balance and accept the loss of £4k contribution allowance for this tax year.0 -
In theory you should be able to ask your other ISA provider to transfer the whole LISA into your ISA. However they may not have processes to do this.
If they don't do this by the end of this tax year on 5th April then the LISA withdrawal penalty would apply and get deducted from the transfer value.
The other option is to withdraw the balance and accept the loss of £4k contribution allowance for this tax year.
Thanks - and in reality a transfer can take up to 6 weeks (I think) so good chance it won't be completed before that date?
I thought the ISA allowances were flexible now, so you can withdraw the £4k, then add it back in, so long as it is within the same tax year? So I could withdraw the £4k to bank, then just add it back in (but to the ISA account rather than the LISA account?0 -
No, flexibility applies to specific products rather than allowances, and if you have a flexible ISA then that gives you the right to withdraw funds and put them back into the same product before the end of the tax year, without it affecting the annual allowance.Warren1989 wrote: »I thought the ISA allowances were flexible now, so you can withdraw the £4k, then add it back in, so long as it is within the same tax year? So I could withdraw the £4k to bank, then just add it back in (but to the ISA account rather than the LISA account?
It'll probably be easier to help if you say exactly which products you have with which providers, but further details on the principle of flexible ISAs are shown at https://www.moneysavingexpert.com/savings/flexible-ISAs.0 -
No, flexibility applies to specific products rather than allowances, and if you have a flexible ISA then that gives you the right to withdraw funds and put them back into the same product before the end of the tax year, without it affecting the annual allowance.
It'll probably be easier to help if you say exactly which products you have with which providers, but further details on the principle of flexible ISAs are shown at https://www.moneysavingexpert.com/savings/flexible-ISAs.
Damn.
The LISA is with Hargreaves Lansdown.
I currently hold a regular ISA with iWeb and also Fidelity.
Maybe if I phone HL and ask them to transfer the LISA into a regular ISA? I could then get this done before the end of the tax year? Then potentially transfer over to Fidelity.0 -
Have you paid any 2017/18 money into S&S ISAs at either iWeb or Fidelity? Given the HMRC rules about keeping current year contributions together for each type of ISA, I believe you'd fall foul of these if you ended the tax year with some 2017/18 money in a HL S&S ISA and other 2017/18 money in an S&S ISA with one of the others.Warren1989 wrote: »Damn.
The LISA is with Hargreaves Lansdown.
I currently hold a regular ISA with iWeb and also Fidelity.
Maybe if I phone HL and ask them to transfer the LISA into a regular ISA? I could then get this done before the end of the tax year? Then potentially transfer over to Fidelity.
Sounds like it would be worth asking whichever one of iWeb or Fidelity holds your 2017/18 contributions if they can transfer in from a LISA at HL and, as per Alexland's post, if they're able to do so before the end of the tax year in a month's time....0 -
Somerset_La_La_La wrote: »I did get told the same as you NevvyC - that current years subscriptions PLUS INTEREST CREDITED reduce what you can pay into the LISA.
In practice, they don't seem to be applying it. I've asked over the phone for my limit, and it matches what it lets me deposit online - £3,500 is blocked as over limit - I'm still allowed to contribute £3,499 exactly before the end of the tax year.
My contributions this year have been £501 (£1 Skipton, £400 HTB ISA, £100 Nutmeg Investment LISA), but I've had about £7 interest/investment income.
So going by what they told me, I actually only have something like £3492 remaining - but Skipton's call centre and their website seem to tell me otherwise! As £3,500 is blocked, they clearly know I've made £501 of deposits - even though they received something like £101 from Nutmeg and an odd amount from the H2B ISA (including prior year subscriptions).
Also if investment had been in something that had rocketed in value, deducting the interest/investment income analogy that Skipton are saying would mean you breach the limit anyway. If I'd stuck £3,500 in Nutmeg Investment ONLY, that had then grown to £4,500... that's just good planning/investing on my side, I should still be allowed my £500 extra in.
At the end of the day they're the financial institution not you - IMO ask them what your remaining limit is and go by that. If it's wrong, they should take the rap from HMRC not us!
Normally I would agreed with you 100% and fight the banks/building societies tooth&nail to the ends of the Earth... But that would be for smaller amounts and where there's less risk or less at stake to lose ; with such a hefty bonus & generous product I think I'll play it on the safe side.
Whilst you make good points ; for example, if your S&S investment had rocketed then that may have made transferring to another LISA a bit more painful in terms of the restrictions & yearly limits with regards to choosing which approach to take (although, if it was rejected from the transfer process for being over limit, you'd be able to retain anything over 4K from that anyway - guessing it would count as interest/dividend as a opposed to a subscription so may not matter, but I digress...) you would still be able to transfer over whatever figure reached your limit (and the good investing on your part with anything over that limit would be a nice little cash injection for whatever over the limit you couldn't transfer and ergo had to move to another account/withdraw - ie. you still get to keep the £ and moreover, you wouldn't have had to add so much of your own money in to top up the LISA to the limit - another bonus there!) but whether or not it counts as a subscription/interest/dividend and how LISA providers treat that seems fairly crucial in the above scenario - it'd be a shame if that was the situation we were in!
I think I may just play this one safe, since my interest is so low ... If it was a lot higher it'd be a much different matter and I would be a bit more stressed over it than this :rotfl:0 -
Have you paid any 2017/18 money into S&S ISAs at either iWeb or Fidelity? Given the HMRC rules about keeping current year contributions together for each type of ISA, I believe you'd fall foul of these if you ended the tax year with some 2017/18 money in a HL S&S ISA and other 2017/18 money in an S&S ISA with one of the others.
Yes, 16k Fidelity and 4k into this LISA.Sounds like it would be worth asking whichever one of iWeb or Fidelity holds your 2017/18 contributions if they can transfer in from a LISA at HL and, as per Alexland's post, if they're able to do so before the end of the tax year in a month's time....
Phoned and Fidelity can't receive a LISA and HL can't do some trickery and send it as a standard ISA. They also said they weren't able to transfer from my LISA to a S&S ISA with them, so all a bit negative.
Looks like I will just have to close the LISA, withdraw to bank and chalk up a lost £4k ISA allowance to experience (I think it was worth it on the off-chance I use a mortgage to purchase a house).0
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