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  • FIRST POST
    • Former MSE Sam M
    • By Former MSE Sam M 1st Dec 15, 2:23 PM
    • 238Posts
    • 159Thanks
    Former MSE Sam M
    Help to Buy ISA guide
    • #1
    • 1st Dec 15, 2:23 PM
    Help to Buy ISA guide 1st Dec 15 at 2:23 PM

    Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
Page 92
    • JohnMl88
    • By JohnMl88 4th Sep 19, 7:50 AM
    • 66 Posts
    • 21 Thanks
    JohnMl88
    Can I open a Help to buy ISA and a LISA the same tax year?
    • eskbanker
    • By eskbanker 4th Sep 19, 9:38 AM
    • 11,395 Posts
    • 14,146 Thanks
    eskbanker
    Can I open a Help to buy ISA and a LISA the same tax year?
    Originally posted by JohnMl88
    Yes, the ISA rules don't tend to relate to opening accounts but funding them, but either way, you can indeed pay into both a HTB and a LISA concurrently as they're different types of ISA.

    However, just in case you hadn't already spotted, you can't benefit from the 25% bonus on both if you're using them towards a first-time property purchase....
    • JohnMl88
    • By JohnMl88 4th Sep 19, 12:00 PM
    • 66 Posts
    • 21 Thanks
    JohnMl88
    Yes, the ISA rules don't tend to relate to opening accounts but funding them, but either way, you can indeed pay into both a HTB and a LISA concurrently as they're different types of ISA.

    However, just in case you hadn't already spotted, you can't benefit from the 25% bonus on both if you're using them towards a first-time property purchase....
    Originally posted by eskbanker
    Thanks I knew that. I’m trying to open a virgin help to buy but the website shows an error after submitting the application.
    • Friendy112
    • By Friendy112 4th Sep 19, 12:35 PM
    • 2 Posts
    • 0 Thanks
    Friendy112
    Hi! This is my first post so sorry if it's not in the right place!

    I have a 16 year old who currently has an every day saver (Halifax) 0.20% and wondered if it is a good idea to open a help to buy account where interest is 2.5% (Nationwide) and gradually transfer it all. It appears that you would still get the interest even if you did not spend the money on a house purchase (just lose the bonus). Are there any snags with this plan??? I would be grateful for any thoughts on this.
    • Alexland
    • By Alexland 4th Sep 19, 12:46 PM
    • 5,765 Posts
    • 5,032 Thanks
    Alexland
    I have a 16 year old who currently has an every day saver (Halifax) 0.20% and wondered if it is a good idea to open a help to buy account where interest is 2.5% (Nationwide) and gradually transfer it all. It appears that you would still get the interest even if you did not spend the money on a house purchase (just lose the bonus). Are there any snags with this plan??? I would be grateful for any thoughts on this.
    Originally posted by Friendy112
    Yes HTB ISAs offer an attractive rate (there are slightly higher HTB ISA rates available in the MSE guide unless they are also contributing to a Cash ISA in the same tax year so need the HTB ISA from a Split Cash ISA provider). There is no need to make a qualifying property purchase and claim the bonus - the money can be withdrawn without penalty.

    Also worth considering a Junior ISA (would require the transfer of any existing Child Trust Fund) which have higher rates than HTB ISAs but the money would be inaccessible until 18 and offer no bonus on a property purchase in future. Still they might want to open a Lifetime ISA from age 18, if the product is still available, for a bonus on the property purchase....

    Alex
    • bossyboston
    • By bossyboston 6th Sep 19, 1:35 PM
    • 1 Posts
    • 0 Thanks
    bossyboston
    Set one up for Daughter
    Hi, is it possible to set a LISA up for my daughter, without her being aware (Nice surprise in years to come) She is 19?
    • Alexland
    • By Alexland 6th Sep 19, 1:50 PM
    • 5,765 Posts
    • 5,032 Thanks
    Alexland
    Hi, is it possible to set a LISA up for my daughter, without her being aware (Nice surprise in years to come) She is 19?
    Originally posted by bossyboston
    No, she is an adult now so she would need to open the account herself and should be aware of all her assets. ISA managers expect adult contributions to come from a bank account in the name of the customer so they don't have to worry about money laundering, etc. You could gift her the money by transferring it into her bank account.

    Alex
    • PurpleMoneyMan
    • By PurpleMoneyMan 9th Sep 19, 10:14 PM
    • 3 Posts
    • 0 Thanks
    PurpleMoneyMan
    Can I get a HTB ISA
    My wife and I have a house, I had an inheritance and paid the deposit, however I'm not named on the deeds my wife is and she pays the mortgage.

    Could I still open and benefit from a HTB ISA as technically I'm not a home owner?
    • eskbanker
    • By eskbanker 9th Sep 19, 11:48 PM
    • 11,395 Posts
    • 14,146 Thanks
    eskbanker
    The eligibility criteria are set out in https://www.helptobuy.gov.uk/documents/2015/12/eligibility-of-ftbs.pdf - on the face of it you should be OK but it sounds a very unusual situation where you contribute the deposit for a property but don't actually take any formal stake in it, especially if there's a mortgage involved (is this solely in your wife's name?), so it may be worth checking with whichever conveyancer/solicitor set this up for you....
    • PJB2019
    • By PJB2019 10th Sep 19, 12:30 AM
    • 1 Posts
    • 0 Thanks
    PJB2019
    Hi
    I opened a cash ISA this year and can withdraw the money with a 24 hour delay.
    Am I able to close the account altogether and open a help to buy ISA instead? The money in my cash ISA isn't meant to be used for a house and is currently around £500. I wanted to open a help to buy ISA before November with the smallest amount possible.

    Would I have find a new one that will allow a split ISA?

    Thanks
    PJB
    • masonic
    • By masonic 10th Sep 19, 6:03 AM
    • 12,357 Posts
    • 9,952 Thanks
    masonic
    Why not transfer the existing cash ISA to a HTB ISA, then withdraw any money you don't want to keep in the HTB ISA (presuming you can find a better rate on a savings account elsewhere - otherwise I'm not sure why you wouldn't just leave it in there).
    • StephenRBall
    • By StephenRBall 10th Sep 19, 11:18 AM
    • 1 Posts
    • 0 Thanks
    StephenRBall
    Thoughts on my stratagy
    My apologies if a similar question has been answered previously. I have looked through this thread but just want to be certain.

    For background: I am a 47 year old higher rate tax payer. I opened a new Easy Access Cash ISA with the Coventry Building Society this year in May 2019 paying 1.49%. I transferred into this nearly £30k from my previous Cash ISA. I have not payed any new money into this Cash ISA.


    I am interested in opening a Help To Buy (HTB) ISA before the 30th November 2019 deadline and am thinking of going with Nationwide or NatWest as they have decent HTB rates and the greatest flexibly, with the option of being able to open a “split ISA”.

    My question: I want to check that the following money transfer plan is OK under the current ISA rules: Open the HTB ISA. Transfer the initial monthly deposit of £1,200 out of my Cash ISA into a non ISA account and then transfer this into the HTB ISA. Follow this with monthly deposits of £200 in the HTB ISA from either my non ISA savings or from further transfers of my Cash ISA (via a non ISA account). Pay NO new money into my Cash ISA while I am paying into the HTB ISA. Next year transfer my Cash ISA to another decent rate Cash ISA.

    I would welcome your thoughts on this plan.
    • masonic
    • By masonic 10th Sep 19, 5:11 PM
    • 12,357 Posts
    • 9,952 Thanks
    masonic
    I see no issues with the above plan. If you aren't going to use your full £20k ISA allowance then withdrawing from your previous tax year cash ISA to fund your HTB ISA is the easiest option.
    • groupThink
    • By groupThink 15th Sep 19, 7:51 PM
    • 2 Posts
    • 1 Thanks
    groupThink
    Stocks & Shares ISA maxed out
    Hi All,


    I wonder if anyone can please offer some advice.



    I've already paid in 20k into my stocks and shares ISA this year. I just heared about the help to buy ISA (thanks Martin) and I really want to open one before it goes.


    Do I have any options here? Open one but don't pay anyting until next year, transfer from the S&S ISA ?



    Applogies for the newbieness
    • eskbanker
    • By eskbanker 15th Sep 19, 11:39 PM
    • 11,395 Posts
    • 14,146 Thanks
    eskbanker
    I've already paid in 20k into my stocks and shares ISA this year. I just heared about the help to buy ISA (thanks Martin) and I really want to open one before it goes.


    Do I have any options here? Open one but don't pay anyting until next year, transfer from the S&S ISA ?
    Originally posted by groupThink
    One of the main ISA rules is that current tax year contributions need to be kept together in one account, so your £20K needs to be in one place and only a tiny fraction of that could go into a new HTB anyway, so that's not a flier. Neither is opening one and not funding it in the same tax year....

    If you've previously paid into ISAs then you could potentially transfer some prior year money into a new HTB ISA to fund it, if both providers are OK with partial transfers?

    Alternatively, you might find that the Lifetime ISA is a suitable proposition for next April, as it offers the same 25% bonus, on a larger annual amount, and isn't being withdrawn anytime soon. You have to hold one for 12 months before being able to access the money without penalties but if you're chucking money at a long-term S&S ISA then you're presumably not in a hurry to buy your first property?
    • kamkop
    • By kamkop 16th Sep 19, 4:03 PM
    • 4 Posts
    • 0 Thanks
    kamkop
    HTB - property abroad
    Good afternoon,

    Looking for an advice regarding HTB ISA. My partner opened HTB in 2017. Apparently during the process of setting it up there was miscommunication. My partner has a property abroad (not bought, not living in) which was mentioned during discussion but bank assistant said it should not be a problem and open HTB ISA account. Now I am confused as the more I read, the more I think it is illegal to hold this account... What would be next steps to fix it? Many thanks in advance for your help!
    • eskbanker
    • By eskbanker 16th Sep 19, 4:23 PM
    • 11,395 Posts
    • 14,146 Thanks
    eskbanker
    My partner has a property abroad (not bought, not living in) which was mentioned during discussion but bank assistant said it should not be a problem and open HTB ISA account. Now I am confused as the more I read, the more I think it is illegal to hold this account... What would be next steps to fix it?
    Originally posted by kamkop
    The definition of first-time buyers for HTB ISA purposes is listed at https://www.helptobuy.gov.uk/documents/2015/12/eligibility-of-ftbs.pdf, which does make it very clear that property ownership outside the UK is treated the same as within the UK and therefore if he owns one abroad he's not entitled to open a HTB ISA.

    Next step: close it....
    • kamkop
    • By kamkop 16th Sep 19, 4:28 PM
    • 4 Posts
    • 0 Thanks
    kamkop
    Yes, makes sense. Thank you. How about interest gained this way? Just does not sound right to get it, although, the total amount might be small.
    • eskbanker
    • By eskbanker 16th Sep 19, 4:54 PM
    • 11,395 Posts
    • 14,146 Thanks
    eskbanker
    How about interest gained this way? Just does not sound right to get it, although, the total amount might be small.
    Originally posted by kamkop
    While there is an argument that your partner was acting in good faith in relying on information provided by a bank employee, if he's feeling conscientious he could declare to the bank that the account was opened in error when ineligible and leave it to them to correct it in accordance with their guidance from HMRC.

    My expectation would be that he'd be allowed to retain the interest but that it would be treated as taxable, which would only result in tax actually being charged if he earns enough interest in total from savings to exceed his personal savings allowance.
    • Rich2808
    • By Rich2808 16th Sep 19, 6:08 PM
    • 865 Posts
    • 696 Thanks
    Rich2808
    While there is an argument that your partner was acting in good faith in relying on information provided by a bank employee, if he's feeling conscientious he could declare to the bank that the account was opened in error when ineligible and leave it to them to correct it in accordance with their guidance from HMRC.

    My expectation would be that he'd be allowed to retain the interest but that it would be treated as taxable, which would only result in tax actually being charged if he earns enough interest in total from savings to exceed his personal savings allowance.
    Originally posted by eskbanker
    Or just close it and take the interest - and not make a fuss about it. Its a mere technical breach based on incorrect advice from the bank when you opened it - and no real harm done over a few quid in interest (which is probably well below the £1,000 tax free allowance anyway) when the total ISA payment per annum would have been well below the maximum £20k allowed. Had the bonus of up to £3k been incorrectly claimed from HMRC it would be quite another matter!
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