Lifetime ISAs guide
Comments
-
ohwattagosiam wrote: »I may be missing something here, but if you're a first time buyer and that's what you're using the LISA money for, then you won't incur any exit penalty, since that is one of the two reasons that LISA's are supposed to be used for.
But then again, it has been about 10 years since the last property crash. People seem to have forgotten house prices can go down as well as up, so we do seem close to the point of the bubble bursting.
There was a mention of 5% returns in those calculations, which are clearly not reasonable if investing in cash and look appropriate to an investment mostly in equities. If so, the 25% the Government takes away could be dwarfed by the amount a stockmarket crash would take away (which is a very likely scenario at some point over the next 5 years).0 -
Hello,
New to the forum, seeking clarification on behalf of my two children.
My ex-wife died 3 years ago. She had a lot of debt (IVA, etc), and though she left her house to our kids, they immediately moved to live with me. After some confusion about what to do with the house, it was eventually repossessed by Newcastle Building Society, and the children received the balance left after the debts were paid.
Then 18 months ago, their maternal grandmother died, and again, she left her house to the children (no debts this time). The house is 300 miles away, the kids have never lived there, and the solicitors who are dealing with the estate are in the process of selling the property on behalf of the kids.
I think I know, but just want to be sure. Are my children classed as having owned a property, and so are not eligible as first-time buyers to open a Lifetime ISA?
Thank you0 -
Chris43214321 wrote: »Hello,
New to the forum, seeking clarification on behalf of my two children.
My ex-wife died 3 years ago. She had a lot of debt (IVA, etc), and though she left her house to our kids, they immediately moved to live with me. After some confusion about what to do with the house, it was eventually repossessed by Newcastle Building Society, and the children received the balance left after the debts were paid.
Then 18 months ago, their maternal grandmother died, and again, she left her house to the children (no debts this time). The house is 300 miles away, the kids have never lived there, and the solicitors who are dealing with the estate are in the process of selling the property on behalf of the kids.
I think I know, but just want to be sure. Are my children classed as having owned a property, and so are not eligible as first-time buyers to open a Lifetime ISA?
So, it might depend on the exact terms of the will. If the will leaves to the children the proceeds of selling the property, then perhaps they never owned it. But I suspect the property was left to them and the trustees decided to sell it.
Also, children cannot legally own property, so I presume the will says it is to be held in trust on their behalf. Title to the property is therefore held by the trustees and the children would have a beneficial interest under the trust. Does "owning an interest in the property" mean title? My guess is that a beneficial interest is "owning an interest in the property", but perhaps not. This is a question for a lawyer.
If these bequests inadvertently deprived the children of the right to use a LISA to buy their first real property, that's a real bear trap. Being left even a 1% interest in granny's bungalow would be enough to cause this problem. In some cases, the value of the interest might be quite small, if the mortgage is quite big. Perhaps wording of wills should be rethought?
Is there another bear trap, that naming someone a trustee of a trust that owns property would (I think) mean they own an interest in the property, so the trustee could not subsequently use a LISA to buy their own property?koru0 -
Another possibility is that the children don't own it until it is distributed from the estate, but again I don't know if being a beneficiary under the will is "owning an interest".koru0
-
Thank you koru for your advice0
-
Chris43214321 wrote: »Thank you koru for your advicekoru0
-
So is the general consensus that these are pretty pointless for non-first-time-buyers? Sounds like the government bonus is roughly what I'd get in tax relief by just putting more into my pension pot. When I reach the 40% tax bracket it sounds even less useful. I guess diversity in funds is a plus though?0
-
So is the general consensus that these are pretty pointless for non-first-time-buyers? Sounds like the government bonus is roughly what I'd get in tax relief by just putting more into my pension pot. When I reach the 40% tax bracket it sounds even less useful. I guess diversity in funds is a plus though?0
-
In general a pension will be better than a LISA for most, but as with any rule of thumb, there will be exceptions, as covered in the article at http://www.moneysavingexpert.com/savings/lifetime-ISAs#pension2, and it's not an either/or choice anyway, there's nothing to stop people having both....0
-
But is there much advantage to having both?
For most people who already own a house, there's no reason to do a LISA if you could do a pension instead. To me, it is something that you primarily do in order to boost your house deposit. The right to use it for retirement is just a reassurance that you would still get to use it if, for some reason, you don't buy a house.[/STRIKE]
Edit: Strike through added, because it is rubbish. See correction by bowlhead99 below.koru0
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards