Tell us you cash ISA questions

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  • JBford
    JBford Posts: 1 Newbie
    Hi,

    Is there a way to pay into both a Help To Buy ISA and standard cash ISA in the same year whilst avoiding the low rate typically associated with the standard cash ISA that forms part of a split ISA. Given I have a cash ISA already set up this tax year that has a good interest rate would the following be feasible within the ISA rules?

    - Open Natwest split Help To Buy ISA and easy access ISA in the next tax year
    - Then transfer full 2018/2019 ISA allowance into Natwest easy access ISA
    - Transfer £16600 from easy access ISA into higher paying ISA previously set up in 2017/2018
    - Transfer remaining £3400 in easy access across monthly (£1200 month 1, £200 subsequent months) to the Natwest `Help To Buy ISA.

    Is there a more straightforward way, or does this still break ISA rules.

    Thanks
  • masonic
    masonic Posts: 23,270 Forumite
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    JBford wrote: »
    Hi,

    Is there a way to pay into both a Help To Buy ISA and standard cash ISA in the same year whilst avoiding the low rate typically associated with the standard cash ISA that forms part of a split ISA. Given I have a cash ISA already set up this tax year that has a good interest rate would the following be feasible within the ISA rules?

    - Open Natwest split Help To Buy ISA and easy access ISA in the next tax year
    - Then transfer full 2018/2019 ISA allowance into Natwest easy access ISA
    - Transfer £16600 from easy access ISA into higher paying ISA previously set up in 2017/2018
    - Transfer remaining £3400 in easy access across monthly (£1200 month 1, £200 subsequent months) to the Natwest `Help To Buy ISA.

    Is there a more straightforward way, or does this still break ISA rules.

    Thanks
    If you are talking about carrying out the partial transfers of the 2018/19 money in the 2019/20 tax year, then this is permitted. But there is nothing to stop you making payments of new money into the Natwest HTB ISA in the normal manner and transfers of previous tax year money from the Natwest easy access ISA.
  • ET18
    ET18 Posts: 48 Forumite
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    If you open a LISA account and buy a house outright, is this allowed or do you have to take a mortgage?
  • masonic
    masonic Posts: 23,270 Forumite
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    ET18 wrote: »
    If you open a LISA account and buy a house outright, is this allowed or do you have to take a mortgage?
    You can open a LISA and buy a house outright. What you can't do is make a penalty free withdrawal to put towards the house if you don't make use of a mortgage.
  • abovewater2016
    abovewater2016 Posts: 11 Forumite
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    edited 10 January 2019 at 9:22PM
    Hi

    I started a limited company last year. I am paying myself a £25,000 salary this tax year. I know it's not ideal but I need the money to clear personal debts - I will be paying myself just under the threshold for 19/20. I have recently opened a savings ISA and a Lifetime ISA and haven't paid any money into them yet. Most importantly, I want to put £4,000 into the Lifetime ISA to get the 25% bonus (I am 35 and the intention of the Lifetime ISA is for my first house). Will I only get the bonus if I put the money in before the end of the tax year? If so, what are the tax implications of taking a £4,000 dividend to then put in the Lifetime ISA before the end of the tax year given I am already paying myself a £25,000 salary? I really do need to brush up on all this!

    My estimate is that there will be a remaining £10,000 in the company account by the end of the tax year if I take the £4,000 on top of my salary. Should I just leave this sitting in the company account (there are hardly any outgoings for the company itself and no debts - there will be accountancy fees when I do my 19/20 tax return and obviously the tax to be paid before January 2020).
  • masonic
    masonic Posts: 23,270 Forumite
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    abovewater2016 wrote: »
    Will I only get the bonus if I put the money in before the end of the tax year?
    You will receive the bonus within a couple of months of paying in the money, whether it is during this tax year or the next.
    If so, what are the tax implication of taking a £4,000 dividend to them put in the Lifetime ISA before the end of the tax year given I am already paying myself a £25,000 salary?
    You have a £2,000 dividend allowance, which, in any case you ought to use if you can. Taxation of dividends above this is at 7.5% for basic rate taxpayers, which is lower than the rate of tax you'll pay on your salary above your personal allowance.
    I really do need to brush up on all this!
    Evidently ;)
  • glaister
    glaister Posts: 63 Forumite
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    Just a quick question to check my understanding of flexible ISAs.

    I have £1000 previous year contributions in a flexible cash ISA and £500 in a non-flexible Innovative Finance ISA. If I transfer from the IFISA to the Cash ISA, will the whole £1500 be flexible, or just the first £1000?

    Thanks!
  • masonic
    masonic Posts: 23,270 Forumite
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    glaister wrote: »
    Just a quick question to check my understanding of flexible ISAs.

    I have £1000 previous year contributions in a flexible cash ISA and £500 in a non-flexible Innovative Finance ISA. If I transfer from the IFISA to the Cash ISA, will the whole £1500 be flexible, or just the first £1000?
    Any money held in a flexible ISA is flexible.
  • Alexland
    Alexland Posts: 9,653 Forumite
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    When you do a transfer the result is the same as if the money was originally contributed into the new ISA in either the previous or current tax year (as applicable). As such the flexibility rules of the new product would apply.
  • Campoverde
    Campoverde Posts: 2 Newbie
    I moved back to UK in August 2018. Having lived abroad for 10yrs
    How can I apply for a better cash isa than the one I have.
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