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  • FIRST POST
    • Dangerous_Dave2k
    • By Dangerous_Dave2k 9th Mar 18, 7:24 AM
    • 84Posts
    • 18Thanks
    Dangerous_Dave2k
    HTB ISA to LISA - should I have done it already?
    • #1
    • 9th Mar 18, 7:24 AM
    HTB ISA to LISA - should I have done it already? 9th Mar 18 at 7:24 AM
    I have an HTB ISA in Barclays which was opened with the maximum amount about a year ago, and was topped up with the maximum 200 per month ever since. It probably has about 3600 from me in it.

    I've decided I want to open a LISA (prospective 1st time home buyer) with Skipton. Reading around, I'm starting to get an inkling that there was a particular strategy I should have pursued to get the maximum benefit from both accounts. Can somebody explain to me what this is, and have I missed the deadline?

    Thanks for any replies.
Page 2
    • ValiantSon
    • By ValiantSon 9th Mar 18, 11:29 PM
    • 2,013 Posts
    • 1,863 Thanks
    ValiantSon
    The rules relate to when the transfer occurs rather than when it was requested. ISA managers are given 30 days to complete a transfer. Tricky.
    Originally posted by Alexland
    I don't necessarily disagree.
    • Dangerous_Dave2k
    • By Dangerous_Dave2k 10th Mar 18, 12:12 AM
    • 84 Posts
    • 18 Thanks
    Dangerous_Dave2k
    Well for it doesn't complete in time there is the danger it will be treated as a HTB to LISA transfer under the rules applying next tax year in which case the HTB ISA balance would count towards the 4k contribution allowance for that year.
    Originally posted by Alexland
    Just wanted to query if you're discussing an additional risk here - am I right in thinking my worst case scenario right now is that the HTB ISA doesn't transfer in time, and therefore I just have my 4000 allowance for 17-18 and my 4000 allowance for 18-19 (of which the HTB money will then form a part)?
    • Alexland
    • By Alexland 10th Mar 18, 10:45 AM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    Yes the risk is that if your previous tax year HTB balance transfer date is considered to be in next tax year then it would reduce the 4000 you can contribute next tax year. You would still be able to contribute 4000 this tax year.
    • Dangerous_Dave2k
    • By Dangerous_Dave2k 24th Mar 18, 6:55 PM
    • 84 Posts
    • 18 Thanks
    Dangerous_Dave2k
    Transfer was completed yesterday - but I'm a bit confused by something: They asked me on the transfer form to estimate how much was in my HTB is on 05/04/17, and I gave them a round number that was about 3 or 4 under the probably actual figure due to interest. I also ticked a box saying "transfer whole balance as of 05/04/17", but they have not done - they have simply transferred my rounded estimate. Am I still alright to top up the LISA by 4k before 06/04/18? I'm a bit worried the transfer's not been done properly. What will happen if the transferred amount is counted as part of this tax year and I try to transfer another 4k?
    • bowlhead99
    • By bowlhead99 24th Mar 18, 7:36 PM
    • 7,976 Posts
    • 14,513 Thanks
    bowlhead99
    They asked me on the transfer form to estimate how much was in my HTB is on 05/04/17
    Originally posted by Dangerous_Dave2k
    I gave them a round number that was about 3 or 4 under the probably actual figure due to interest
    What will happen if the transferred amount is counted as part of this tax year and I try to transfer another 4k?
    You said that the guessed amount you told to them was a few pounds LESS than the total amount (i.e. total including account balance and earned unpaid interest) that you had in HTB on 5/4/17.

    So what you have transferred to them was LESS than the amount you were allowed to transfer to them.

    If you then give them another 4k representing your 2017/18 allowance for 'new money', then the total you will have given them is still LESS than the amount you could have given them (which would have been the old money you gave them, plus 3-4 more of old money, plus the 4k of new money).
    Last edited by bowlhead99; 24-03-2018 at 7:39 PM.
    • Alexland
    • By Alexland 24th Mar 18, 7:48 PM
    • 2,571 Posts
    • 1,953 Thanks
    Alexland
    Pleased to hear the transfer went well.

    Yes you are fine to add 4k this year - you essentially instructed them to transfer less than the HTB ISA balance at 5th April 2017 so you still have some of the previous year value in the old HTB ISA. Your bonus will now be around 1 less than it could have been - hope it doesn't cause you to miss out on that dream home!

    Alex.
    • Dangerous_Dave2k
    • By Dangerous_Dave2k 4th Apr 18, 2:00 AM
    • 84 Posts
    • 18 Thanks
    Dangerous_Dave2k
    Just wanted to check - should I cancel payments into the HTB ISA now I've maxed out my allowance for the LISA for this tax year? I don't want to cause any issues with the LISA.
    • bowlhead99
    • By bowlhead99 4th Apr 18, 6:23 AM
    • 7,976 Posts
    • 14,513 Thanks
    bowlhead99
    If you put more money into the HTB ISA it will count against the total ISA allowance (20k / yr) but won't count against the LISA allowance this year unless you transfer it out of the HTB ISA and over into the LISA this year.

    The LISA allowance is about what you put into the LISA and not about what you don't put into the LISA.
    • Dangerous_Dave2k
    • By Dangerous_Dave2k 4th Apr 18, 9:08 AM
    • 84 Posts
    • 18 Thanks
    Dangerous_Dave2k
    I'm more concerned with the government bonus, which (since I think you get interest on it), is presumably paid during the life of the LISA/HTB ISA, not after you choose which one you're going to use (or is it 'virtual interest' until you make the choice?). So does that mean that, early on, you have to somehow choose one and not the other to receive this bonus?
    • eskbanker
    • By eskbanker 4th Apr 18, 9:43 AM
    • 7,431 Posts
    • 8,001 Thanks
    eskbanker
    I'm more concerned with the government bonus, which (since I think you get interest on it), is presumably paid during the life of the LISA/HTB ISA, not after you choose which one you're going to use (or is it 'virtual interest' until you make the choice?). So does that mean that, early on, you have to somehow choose one and not the other to receive this bonus?
    Originally posted by Dangerous_Dave2k
    No, bonuses are paid in different ways between these products:

    With LISA, bonuses are paid on an ongoing basis during the life of the account, shortly after making any contributions.

    With HTB, the bonus is only added as a one-off, at the time it's claimed when making the property purchase.

    If you use the LISA with bonuses for your purchase, you simply don't claim the HTB bonus at the end.

    If you use the HTB bonus, you either have to repay the LISA ones added up to that point and a bit more (if you withdraw the LISA money), or leave the money in the LISA until age 60 if you want to withdraw it without penalty.
    • Dangerous_Dave2k
    • By Dangerous_Dave2k 19th Apr 18, 3:03 AM
    • 84 Posts
    • 18 Thanks
    Dangerous_Dave2k
    Checking over my LISA, I can see I haven't yet received any bonuses. I think I read that bonuses are paid monthly, but can anyone confirm this?

    Secondly, I'm wanting to transfer the LISA to Skipton, but should I put in the 2018/19 money in before the transfer, or after, or is either allowed?
    • eskbanker
    • By eskbanker 19th Apr 18, 10:31 AM
    • 7,431 Posts
    • 8,001 Thanks
    eskbanker
    Checking over my LISA, I can see I haven't yet received any bonuses. I think I read that bonuses are paid monthly, but can anyone confirm this?
    Originally posted by Dangerous_Dave2k
    They're paid monthly from this month onwards - the bonus due on any contributions up to 5 April 2018 should arrive in your account by early May, and from then on bonuses are earned in monthly claim periods from 6th of one month to 5th of the following month, and should arrive within 28 days of the end of each claim period.

    Secondly, I'm wanting to transfer the LISA to Skipton, but should I put in the 2018/19 money in before the transfer, or after, or is either allowed?
    Originally posted by Dangerous_Dave2k
    Either is allowed.
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