James asks: “Can I invest into a Stock&Shares ISA and still use a Help-to-Buy ISA in 1 December 2015 when it comes out? And is there a maximum income for people who want to use the Help-to-Buy ISA?”
Question 29 – Help To Buy ISA Questions – Shownotes
Today’s question comes from James:
Can I invest into a Stock&Shares ISA and still use a Help-to-Buy ISA in 1 December 2015 when it comes out? And is there a maximum income for people who want to use the Help-to-Buy ISA?
Also, if two of you are trying to buy a flat together can you combine two help to buy isas? Does this double the max property value you can put down on?
Thanks for your question James.
Help To Buy ISA Restrictions
The Help-To-Buy ISA which you correctly say is due to come into place at the start of December is bringing up a lot of questions, as some of the wording in the government guidance isn’t 100% clear.
For those who aren’t aware the Help-To-Buy ISA allows you to put in £1,000 when you open the account, and then £200 every month (including the month which you open the account). The government will then add 25% on top of all of your contributions in the form of a “bonus” when you use the money in your HTB ISA to buy your first home.
The minimum you need to get the bonus is £1,600 (£400 bonus) and the maximum is £12,000 (£3,000 bonus) – which would take 55 months (or just over 4 and a half years to save).
Help To Buy ISA vs Cash ISAs
Now, the rule with James is referring to is that you can’t contribute to a cash ISA and a help-to-buy ISA in the same tax year. This means that if you’ve made any contributions to a cash ISA (either new or existing) since 6 April 2015, then you won’t be able to contribute to a help-to-buy ISA until the next tax year (6 April 2016).
However, this rule is only for CASH ISAs. Therefore, James, to answer your question, you can actually invest in a Stocks & Shares ISA and a Help-to-Buy ISA in the same year.
The second part of James’ question is if there is a salary maximum to benefit from the HTB scheme. From the current documentation, I’m pretty sure the answer here is no. There seems to be no link between the use of the HTB ISA scheme and income.
The only limits are the maximum total saved in the account of £12,000, the £200 monthly contribution limit and a maximum value of the house purchased, which is £450k in London and £250k anywhere else in the UK.
Help To Buy ISA Joint Applications
Continuing with your questions James, if there are two of you, you can both save in your own HTB ISA, meaning that you can save a total of £24,000 and receive a bonus of £6,000 towards a joint house purchase.
However, finally, the maximum price limits of £450k in London and £250k anywhere else in the UK is a per-property limit rather than a per-person limit and so this doesn’t double the maximum limits.
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