Transferring HTB ISA to LISA

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dancingfrog
dancingfrog Posts: 5 Forumite
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in Savings & investments
Hello

I have an existing HTB ISA of more than £4000 that I wish to transfer to LISA before this tax year ends.
I only have about £3000 ISA allowance left this tax year before it exceeds the 20k limit.

When I opened my Skipton LISA today and requested the transfer, staff from Skipton reassured me that I could transfer £4000 into the LISA from my HTB as it would not count as 'new' contribution, and I will still have my £3000 ISA allowance left this tax year.

I remember reading that transferring any ISA into LISA will count as 'new' contribution towards personal ISA allowance, even if the money is already in an ISA.

What do you guys think? Can I transfer all 4000 safely and still have my 3000 ISA allowance before the tax year ends?

New to the forum. Sorry if this was a rookie question - cheers!

DF

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  • eskbanker
    eskbanker Posts: 31,038 Forumite
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    dancingfrog wrote: »
    When I opened my Skipton LISA today and requested the transfer, staff from Skipton reassured me that I could transfer £4000 into the LISA from my HTB as it would not count as 'new' contribution, and I will still have my £3000 ISA allowance left this tax year.

    I remember reading that transferring any ISA into LISA will count as 'new' contribution towards personal ISA allowance, even if the money is already in an ISA.

    What do you guys think? Can I transfer all 4000 safely and still have my 3000 ISA allowance before the tax year ends?
    Skipton are right and your recollection (or whatever you were reading) is wrong - transferring from a non-Lifetime ISA into a LISA counts towards the £4K LISA limit but not the overall £20K ISA allowance.

    There's a government-published table that summarises the rules on such matters: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/691591/Table_1.pdf
  • darkidoe
    darkidoe Posts: 1,125 Forumite
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    Hmm. I doubt you will get bonus for anything about 4k so maximum bonus would be 1k.

    I don't get it. If they are happy to accept a transfer of over 4k, then what is the rule on annual LISA 4k limit for?

    Save 12K in 2020 # 38 £0/£20,000
  • eskbanker
    eskbanker Posts: 31,038 Forumite
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    darkidoe wrote: »
    Hmm. I doubt you will get bonus for anything about 4k so maximum bonus would be 1k.

    I don't get it. If they are happy to accept a transfer of over 4k, then what is the rule on annual LISA 4k limit for?
    No, it isn't possible to put more than £4K into a LISA in a tax year, regardless of whether it's new money or a transfer - I don't believe OP was suggesting that this was possible (or even desirable) though, and, as I read it, just wants to have the residual £3K allowance available for other (non-Lifetime) ISAs....
  • darkidoe
    darkidoe Posts: 1,125 Forumite
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    dancingfrog wrote: »
    Hello

    I have an existing HTB ISA of more than £4000 that I wish to transfer to LISA before this tax year ends.
    Probably accepted as a partial transfer then.

    Save 12K in 2020 # 38 £0/£20,000
  • diggingdude
    diggingdude Posts: 2,445 Forumite
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    you can only transfer £4k. The only exception to this I know of was the 1st year of the LISA when you could transfer entire H2B ISA into LISA and add additional 17/18 contribution to max £4k but that is no longer in place
    An answer isn't spam just because you don't like it......
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