New Lifetime ISA

The Lifetime Individual Savings Account (ISA) is a longer term tax-free account that receives a government bonus. The accounts will be available from today (6 April 2017). HMRC have produced a helpful guide on the account. Some of which is reproduced below:

Opening a Lifetime ISA

You can open a Lifetime ISA if you’re aged 18 or over but under 40.

As with other ISAs, you won’t pay tax on any interest, income or capital gains from cash or investments held within your Lifetime ISA.

Saving in a Lifetime ISA

You can save up to £4,000 each year in a Lifetime ISA. There’s no maximum monthly savings contribution, and you can continue to save in it until you reach 50. The account can stay open after then but you can’t make any more payments into it.

The £4,000 limit, if used, will form part of your overall annual ISA limit. From the tax year 2017 to 2018, the overall annual ISA limit will be £20,000.

Example – you could save:

£11,000 in a cash ISA

£2,000 in a stocks and shares ISA

£3,000 in an innovative finance ISA

£4,000 in a Lifetime ISA in one tax year.

Your Lifetime ISA won’t close when the tax year finishes. You’ll keep your savings on a tax-free basis for as long as you keep the money in your Lifetime ISA.

Lifetime ISAs can hold cash, stocks and shares qualifying investments, or a combination of both.

Government bonus

When you save into your Lifetime ISA, you’ll receive a government bonus of 25% of the money you put in, up to a maximum of £1,000 a year.

Withdrawals

You can withdraw the funds held in your Lifetime ISA before you’re 60, but you’ll have to pay a withdrawal charge of 25% of the amount you withdraw.

A withdrawal charge will not apply if you’re:

using it towards a first home

aged 60

terminally ill with less than 12 months to live.

If you die, your Lifetime ISA will end on the date of your death and there won’t be a withdrawal charge for withdrawing funds or assets from your account.

Transferring a Lifetime ISA

You can transfer your Lifetime ISA to another Lifetime ISA with a different provider without incurring a withdrawal charge.

If you transfer it to a different type of ISA, you’ll have to pay a withdrawal charge.

Saving for your first home

Your Lifetime ISA savings and the bonus can be used towards buying your first home, worth up to £450,000, without incurring a withdrawal charge. You must be buying your home with a mortgage.

You must use a conveyancer or solicitor to act for you in the purchase, and the funds must be paid direct to them by your Lifetime ISA provider.

If you’re buying with another first time buyer, and you each have a Lifetime ISA, you can both use your government bonus. You can also buy a house with someone who isn’t a first time buyer but they will not be able to use their Lifetime ISA without incurring a withdrawal charge.

Your Lifetime ISA must have been opened for at least 12 months before you can withdraw funds from it to buy your first home.

If you have a Help to Buy ISA, you can transfer those savings into your Lifetime ISA or you can continue to save into both – but you’ll only be able to use the government bonus from one to buy your first home.

You can transfer the balance in your Help to Buy ISA into your Lifetime ISA at any time if the amount is not more than £4,000.

In 2017/18 only, you can transfer the total balance of your Help to Buy ISA, as it stands on 5 April 2017, into your Lifetime ISA without affecting the £4,000 limit.

If you would like to discuss any of this further then please get in touch.  0116 2423400 or info@torrwaterfield.co.uk

THE BENEFITS OF USING APPS

In today’s fast moving world we are all looking for ways to save time.  The majority of us carry some kind of hand held device, whether it is a tablet or simply a mobile phone on which we can organise our day to day lives.  We even provide our children with these devices to occupy them and give ourselves five minutes of peace and quiet!

Apps can be downloaded to hand held devices and are generally a cheap way to provide not only entertainment but also as a means to seek and manage information.  Where our children are happy to play games and line the pockets of the game creators of ‘Flappy Birds’ and ‘Candy Crush,’ perhaps we as adults are looking for something a little more informative and useful.

I monitor and manage important deadline dates for the clients of Torr Waterfield and I find the Companies House App an extremely useful business tool.  By searching for companies on this App I am able to instantly see information such as the following:

  • Company number
  • Date of incorporation
  • Registered Office address, along with a link to view the location on a map
  • The company accounts reference date
  • The date the last set of submitted accounts were made up to
  • The date the next set of accounts are due for submission
  • The date the last submitted annual return (now known as a confirmation statement) was made up to
  • The date the next annual return/ confirmation statement is due for submission
  • Nature of the business
  • Current and resigned company directors and secretaries and certain details about the company officers
  • History of submitted documents

This App is available to everyone, so if you think your business may find this company search facility useful then you may be interested to know that it can be downloaded for free.

As mentioned by my colleague Calum Ainge in his June 2016 blog, entitled Keep Up To Date And Download Our Free Tax App,’  the Torrwaterfield Tax App is also available free of charge and includes features such as key tax dates, tax tips, news, tax tables and it even has a tax calculator. app-phone

If you think that your business may benefit from the above Apps then all you need to do is either visit the App store or Google play and download your Apps for free.

Beth Judd, Accounts & Tax

Keep up to date and download our free Tax App

Here at Torrwaterfield we are constantly updating our systems and software to keep up to date with ever changing technology. Part of this included creating a Taxapp. The Torrwaterfield Taxapp is free to download and available on both IOS devices app-phone(App store) and Android devices (Google play).  

The app includes the following features:

Key Tax Dates – A reminder of important tax dates that can be updated to your calendar with a tap of the screen.

Tax Tips – A section that provides detailed tips and explanations which cover VAT, the family, businesses, selling assets and tax efficient savings.

News – An up to date newsfeed to keep you regularly informed on topics that matter to you or your business.

Tax Tables – Key tax rate tables with explanatory notes so we can now keep you up to date on the current tax position, such as the latest advisory fuel rates which are reviewed quarterly.

Tax calculators – A range of tax calculators including gross pay to net, gross pay to net (self-employed), VAT due, corporation tax due, company car and fuel benefits, SDLT due, loan repayments and mortgage repayments.

My personal favourite feature is the tax calculators. They allow you to easily work out tricky sums. For example, you can work out your company car and fuel benefits by entering the value of the car, its CO2 emissions, if it’s diesel or petrol and whether or not the company pays for fuel. You will then be instantly shown your car and fuel benefits for the previous and current tax year.

If you think any of the above will be useful for you or your business then please feel free to download the app by searching for ‘torr waterfield’ on either the App Store or Google play.

Calum Ainge, Accounts & Tax
DSC_5428