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  • FIRST POST
    • toothdoctor
    • By toothdoctor 11th May 18, 10:14 AM
    • 21Posts
    • 19Thanks
    toothdoctor
    LISA Transfer Question
    • #1
    • 11th May 18, 10:14 AM
    LISA Transfer Question 11th May 18 at 10:14 AM
    Hi all
    I opened a Skipton cash LISA towards the end of last year just so that I didn't lose the allowance. However I am planning to use the money for later life so basically want to transfer the money to a HL S&S LISA. If I open a HL LISA now and invested 4000 today (new contributions) would I still be able to transfer my Cash LISA of 5000 (contribution plus bonus for 1718 tax year) from Skipton to HL? I have read that transferring a LISA to a different provider does affect your annual LISA contributions but not your annual ISA contributions.
    Thanks
Page 1
    • eskbanker
    • By eskbanker 11th May 18, 1:27 PM
    • 8,402 Posts
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    eskbanker
    • #2
    • 11th May 18, 1:27 PM
    • #2
    • 11th May 18, 1:27 PM
    I opened a Skipton cash LISA towards the end of last year just so that I didn't lose the allowance. However I am planning to use the money for later life so basically want to transfer the money to a HL S&S LISA. If I open a HL LISA now and invested 4000 today (new contributions) would I still be able to transfer my Cash LISA of 5000 (contribution plus bonus for 1718 tax year) from Skipton to HL?
    Originally posted by toothdoctor
    Yes. Oops, no! As per subsequent post, HL don't accept LISA transfers so the issue of transferred balances versus annual limits is moot.

    I have read that transferring a LISA to a different provider does affect your annual LISA contributions but not your annual ISA contributions.
    Originally posted by toothdoctor
    Wherever you read that was wrong then!

    The official rules at https://www.gov.uk/guidance/lifetime-isas-for-isa-managers are clear:
    The following are not current year payments [i.e. limited to the 4K annual LISA allowance]:
    • [...]
    • cash or investments transferred to a Lifetime ISA from another Lifetime ISA
    Lifetime ISAs can be transferred between Lifetime ISA managers without incurring a withdrawal charge. There is no limit on the amount transferred. The normal ISA transfer rule applies and any current year payments must be transferred in full to the new Lifetime ISA manager.
    Last edited by eskbanker; 11-05-2018 at 4:46 PM. Reason: Original generic guidance didn't take into account provider-specific terms
    • toothdoctor
    • By toothdoctor 11th May 18, 3:01 PM
    • 21 Posts
    • 19 Thanks
    toothdoctor
    • #3
    • 11th May 18, 3:01 PM
    • #3
    • 11th May 18, 3:01 PM
    Many thanks for your reply eskbanker. That link provides me with a lot of information. I thought the same as you but received this reply from HL when I asked them the question

    `Thank you for your enquiry regarding the Vantage Lifetime ISA.

    You are able to open a 2018/19 Lifetime ISA with Hargreaves Lansdown, however under HMRC regulation you can only subscribe to one Lifetime ISA per tax year. As a result you will not be able to contribute to your Lifetime ISA with Skipton for this tax year.

    The subscription limit of 4,000 is included within the overall ISA subscription allowance, currently 20,000 per annum. This means that you could subscribe 4,000 to a Lifetime ISA and a further 16,000 to a Cash ISA or a Stocks & Shares ISA during the 2019/20 tax year if you so wish.

    Unfortunately you are unable to transfer your existing Lifetime ISA in to Hargreaves Lansdown, and so you would have to keep your Lifetime ISAs with separate providers.


    That last paragraph says that I can't transfer which contradicts what is said in the info for isa managers. It looks like HL have given me the incorrect information which isn't great coming from one of the largest investment platform.
    • AirlieBird
    • By AirlieBird 11th May 18, 3:42 PM
    • 1,039 Posts
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    AirlieBird
    • #4
    • 11th May 18, 3:42 PM
    • #4
    • 11th May 18, 3:42 PM
    What HL are telling you in a not very good way is that they are not currently accepting transfers in of a Lifetime ISA to their Lifetime ISA. You would need to look to transfer to another investment platform that was accepting transfers of Lifetime ISAs.
    Did you really mean to put loose?
    Lose: no longer possess, not to retain, unable to find
    Loose: not firmly or tightly fixed in place
    • toothdoctor
    • By toothdoctor 11th May 18, 3:55 PM
    • 21 Posts
    • 19 Thanks
    toothdoctor
    • #5
    • 11th May 18, 3:55 PM
    • #5
    • 11th May 18, 3:55 PM
    Thanks AirlieBird, that makes perfect sense. Although the Lisa rules state that you can transfer from one Lisa to another like normal Isas the Isa managers are under no obligation to accept transfers. However I have read on these forums that people have transferred nutmeg to HL. I assume they transferred normal is as and not lisas. Thanks again
    • Alexland
    • By Alexland 11th May 18, 5:19 PM
    • 3,602 Posts
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    Alexland
    • #6
    • 11th May 18, 5:19 PM
    • #6
    • 11th May 18, 5:19 PM
    Yes we transferred our LISAs from Nutmeg to HL however that was before HL decided to stop accepting LISA transfers. Your best option is probably to open a LISA with AJ Bell YouInvest for this year's LISA contribution and ask them to transfer in your 5k Skipton LISA from last year.

    AJ Bell have a cheaper 0.25% platform fee (versus 0.45% for HL) but charge 1.50 per fund trade so you want to keep the trade volumes to a minimum.

    The main reason we chose HL is that I already have money in my Halifax SIPP administered by AJ Bell so wanted to spread accounts across multiple financial institutions to reduce exposure. Also with the discount that HL achieve on some fund manager OCFs it works out about the same price on AJ Bell in total.

    I estimate that if we can contribute 4k per year into LISAs starting in our mid 30s until we are age 50 then with the bonuses and with modest growth above inflation that should grow into pots at age 60 worth circa 100k to 150k in today money. However the rules will probably change along the way...

    Alex.
    Last edited by Alexland; 11-05-2018 at 8:50 PM.
    • toothdoctor
    • By toothdoctor 11th May 18, 7:14 PM
    • 21 Posts
    • 19 Thanks
    toothdoctor
    • #7
    • 11th May 18, 7:14 PM
    • #7
    • 11th May 18, 7:14 PM
    Thanks. Was considering AJ Bell but put off as I heard that they collect there fees via selling off some of your investments so in effect I couldn't invest the full 4000 (8000 for me as I am using my wifes allowance as well). With hl I think you can add cash to a separate account that they take the fees from. considering the blackrock fund which is discounted on hl but this saving is eliminated as aj bell have lower platform fee
    • Alexland
    • By Alexland 11th May 18, 7:21 PM
    • 3,602 Posts
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    Alexland
    • #8
    • 11th May 18, 7:21 PM
    • #8
    • 11th May 18, 7:21 PM
    Yes with HL you can pay platform fees via a separate Fund & Share account however that account will eventually have a closure fee and I prefer paying out of the LISA cash balance as thats less money tied up until 60.

    Either way for your position HL isn't an option for your Skipton transfer so you might as well go AJ Bell as the differences are both marginal and debatable.

    Alex
    • toothdoctor
    • By toothdoctor 11th May 18, 7:54 PM
    • 21 Posts
    • 19 Thanks
    toothdoctor
    • #9
    • 11th May 18, 7:54 PM
    • #9
    • 11th May 18, 7:54 PM
    I see what you are saying but the closure fee is only 25+ Vat i.e.30 I am sure that the growth of the funds over the next 15-20 Years (I am in my 30's) will make this irrelevant (correct me if I am wrong). However you are quite right I can't transfer my Skipton LISA to them so I have to decide whether to keep my skipton Lisa (10,000 myself & wives) earning 0.75% and open a HL Isa and contribute future tax year allowances to that for the foreseeable future or transfer my Skipton to AJ Bell and contribute to that. I appreciate you taking the time to reply, I have learnt a lot
    • Alexland
    • By Alexland 11th May 18, 8:18 PM
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    Alexland
    Well yes you would get a bit more growth within the LISA if you paid your fees outside the account however if you pay the fees from within the account then the money you would have otherwise paid the fees outside the account could be invested in a normal S&S ISA and produce similar growth outside the account except with the benefit that the money would not be tied up to 60.

    I have previously been a direct customer of AJ Bell YouInvest (for my SIPP before I transferred it to Halifax SD administered by AJ Bell for lower fees on large fund holdings) and they do a fairly good job. You need to ensure there is enough cash in the LISA to pay the fees or they charge a fee if they have to sell holdings to pay fees.

    It's really not worth leaving last year's 5ks in a below inflation Skipton account for 20+ years in order to progress your future contributions with HL. The differences between HL and AJ Bell are marginal.

    Alex.
    Last edited by Alexland; 11-05-2018 at 8:31 PM.
    • toothdoctor
    • By toothdoctor 11th May 18, 8:28 PM
    • 21 Posts
    • 19 Thanks
    toothdoctor
    Thank you Alexland. I think I will look at AJ bell and see how all the fees stack up. I was thinking of making a regular contribution monthly to benefit from cost pound averaging but may look at investing every 2-3 months to reduce costs albeit only a few quid. You are write leaving 10k ( my wife and I) in a below inflation account is not good
    • Alexland
    • By Alexland 11th May 18, 8:42 PM
    • 3,602 Posts
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    Alexland
    Even if you only make contributions once a year you will still benefit from cost averaging over the very long term life of the account. Now the LISA bonuses are paid monthly (as cash requiring an investment trade...) a month or two after each contribution it might just make more sense to try and fill the accounts at the start of the tax year to get the bonuses earning investment returns (the overall market direction is upwards) earlier?

    Alex.
    Last edited by Alexland; 11-05-2018 at 8:46 PM.
    • toothdoctor
    • By toothdoctor 14th May 18, 7:40 PM
    • 21 Posts
    • 19 Thanks
    toothdoctor
    Just an update HL not accepting Lisa to Lisa transfers due to the complexity of the product. They said it was a business decision they made. Just another quick question can you hold different types of Lisa i.e hold a cash Lisa and a s&s Lisa like you can with normal Isa for example can I keep my skipton Lisa and open up a aj bell/hl Lisa for this years contribution?
    • Zorillo
    • By Zorillo 14th May 18, 8:19 PM
    • 427 Posts
    • 280 Thanks
    Zorillo
    No. Your Lifetime ISA is the only one you get in your lifetime.
    • eskbanker
    • By eskbanker 14th May 18, 11:32 PM
    • 8,402 Posts
    • 9,506 Thanks
    eskbanker
    Just another quick question can you hold different types of Lisa i.e hold a cash Lisa and a s&s Lisa like you can with normal Isa for example can I keep my skipton Lisa and open up a aj bell/hl Lisa for this years contribution?
    Originally posted by toothdoctor
    No. Your Lifetime ISA is the only one you get in your lifetime.
    Originally posted by Zorillo
    HMRC disagree, at https://www.gov.uk/guidance/lifetime-isas-for-isa-managers#investor:
    Eligible individuals are able to open more than one Lifetime ISA during their lives, but are only able to contribute to one Lifetime ISA in each tax year
    • claire***
    • By claire*** 17th May 18, 5:51 PM
    • 7 Posts
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    claire***
    I posted a question on this yeasterday on another thread but just a watch out that i found today is that once you reach 40 you cannot currently open another LISA even if you already have one from previous tax years. Which means that post 40 you are stuck with the provider you have. I turned 40 shortly after the LISA was launched last year so was able to open one with skipton and have contacted both HL and aj bell today and both have said that once you reach 40 you cannot open a LISA, even just to do a transfer (which HL wont do anyway). Very annoying!
    • toothdoctor
    • By toothdoctor 18th May 18, 8:07 AM
    • 21 Posts
    • 19 Thanks
    toothdoctor
    Thanks for that. In Martins article on the main mse site it says that you can open a new Lisa after 40 just to transfer Lisa to get a better rate. I thought for example when I pass 40 I could open an aj bell account transfer my skipton into this and place further contributions into my aj bell account until I was 50. Why do the government have to make the rules so complicated?
    • claire***
    • By claire*** 18th May 18, 9:18 AM
    • 7 Posts
    • 0 Thanks
    claire***
    Just to clairify I think its the providers that are unable to open the accounts rather than government rules. This is the email response I received from AJ Bell yesterday:-


    Unfortunately our LISA application was set up to not allow over 40s to proceed with it. This has yet to be amended in the application so will still not allow anyone over 40 to open the account, and I'm afraid it's not due to be looked at for a few months, As such, you won't be able to open a LISA with us just yet.

    As we've been receiving a few of these queries lately, we are pushing for the application to be amended sooner rather than later but I still wouldn't be able to confirm exactly when this will happen.

    • eskbanker
    • By eskbanker 18th May 18, 10:34 AM
    • 8,402 Posts
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    eskbanker
    Thanks for that. In Martins article on the main mse site it says that you can open a new Lisa after 40 just to transfer Lisa to get a better rate. I thought for example when I pass 40 I could open an aj bell account transfer my skipton into this and place further contributions into my aj bell account until I was 50. Why do the government have to make the rules so complicated?
    Originally posted by toothdoctor
    Yes, as claire*** says, it's (at least some) providers who have chosen not to implement this yet rather than a constraint within the government rules, which, as per the document linked a couple of posts back, do clearly state:
    Lifetime ISAs may only be opened by an eligible individual either on or after their 18th birthday but not once the individual has reached 40 (other than an account opened to receive a transfer from another Lifetime ISA....
    Has anyone checked the other S&S LISA providers yet to see if they'll accommodate over-40s opening accounts to transfer into? There are other S&S LISA providers beyond HL and AJ Bell, five being listed at https://www.which.co.uk/money/savings-and-isas/isas/lifetime-isas-ac6mf6s7r9d5#headline_9
    • Alexland
    • By Alexland 18th May 18, 11:31 AM
    • 3,602 Posts
    • 2,930 Thanks
    Alexland
    Has anyone checked the other S&S LISA providers yet to see if they'll accommodate over-40s opening accounts to transfer into? There are other S&S LISA providers beyond HL and AJ Bell, five being listed at https://www.which.co.uk/money/savings-and-isas/isas/lifetime-isas-ac6mf6s7r9d5#headline_9
    Originally posted by eskbanker
    Share Center's transfer form seems to cover the scenarios nicely. You declare:

    "Either: I am 18 years of age or over but under the age of 40, or, the account is being opened to receive investments from another lifetime ISA, a defaulted lifetime ISA subscription or a returned withdrawal after a failed first time residential purchase"

    https://www.share.com/globalassets/assets/downloads/lisa_transfer.pdf

    Alex.
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