Lifetime ISAs guide

badger09

radoslaff wrote: »

I've read quite a lot about LISA and I'm planning moving my and my wife's Help To Buy ISAs into new Skipton LISAs. The problem is that recently we have had quite a few searches on our credit files with a few more to come. Do they make a search when applying for LISA? In general this is not a credit product so they shouldn't, but it's just common sense not a rule.

No, because as you say, no credit is involved.

They will obviously carry out an ID check though as part of the application process. Extract from the online form:

'I understand that an identity check may be carried out by both CallCredit Ltd and a fraud prevention agency against the details that I enter.'

Isaac_:)

Hi all,

I'm looking at opening the Skipton LISA. At the moment my savings are in current accounts paying a lot more interest than the 0.75% that the LISA offers. My question is therefore whether it would be possible/advisable to pay the £4k (or whatever I can afford) in one lump sum at the end of each financial year (say, 31st March) so that I can benefit from the higher interest rates offered by my current accounts, while still picking up the 25% bonus on what I put in the LISA during a given financial year. Or would the bonus be prorated down depending on the length of time during that financial year my money was in the LISA, as is the case for interest payments?

Does my question make sense?

Thanks.

Alexland

Hi

Yes you can make the contribution towards the end of the tax year (which ends on 5th April) and you will still get the full 25% bonus. HMRC don't care how long it has been in the account only that it occurred in the correct period.

However providers get busy towards the end of the tax year so it's advisable to open the account nice and early and make an initial deposit (incase they have problems with verifying your identity or linking to your bank account).

Personally I don't like the stress of running things right to the deadline (incase their website has problems, etc) so I would put the final contribution into the account around a month in advance.

Alex

Isaac_:)

Alexland wrote: »

Hi

Yes you can make the contribution towards the end of the tax year (which ends on 5th April) and you will still get the full 25% bonus. HMRC don't care how long it has been in the account only that it occurred in the correct period.

However providers get busy towards the end of the tax year so it's advisable to open the account nice and early and make an initial deposit (incase they have problems with verifying your identity or linking to your bank account).

Personally I don't like the stress of running things right to the deadline (incase their website has problems, etc) so I would put the final contribution into the account around a month in advance.

Alex

Thanks!

Will this still be the case after April next year when the bonus will be paid monthly?

Alexland

Yes HMRC really don't care when you make the contribution as long as you don't exceed the annual limit. The bonus is always 25%.

Duggary

I am looking into opening a LISA for myself, I just need to clarify a few things

#1 If I used my LISA for a residential mortgage, how long would I have to live in the house before I can sell the house or let it out. I would assume there are stipulations in place where I wouldn't be able to buy a house and then rent it out, for example, 3 months later.

#2 If I used my LISA for a residential mortgage, and then inherited an additional property, would there be any penalties.

eskbanker

Duggary wrote: »

#1 If I used my LISA for a residential mortgage, how long would I have to live in the house before I can sell the house or let it out. I would assume there are stipulations in place where I wouldn't be able to buy a house and then rent it out, for example, 3 months later.

There's no specified timescale but see the various scenarios discussed at
https://blog.moneysavingexpert.com/2016/04/19/can-you-rent-out-a-home-bought-with-a-help-to-buy-isalifetime-isa/

Duggary wrote: »

#2 If I used my LISA for a residential mortgage, and then inherited an additional property, would there be any penalties.

No, assuming you were a first-time buyer at the point of using the LISA for the mortgaged purchase.

rachlikeswinter

FYI, just received this email from Skipton:

"If you’re thinking about transferring an existing Help to Buy ISA or other ISA into your Skipton Cash Lifetime ISA in this tax year, our window to do so closes on 1 March 2018. After this date, you will no longer be able to apply to transfer into your Skipton Cash Lifetime ISA in the 2017/18 tax year. This is the only opportunity to make a single transfer of the balance of a Help to Buy ISA as at 5 April 2017, without it counting towards your £4,000 annual Lifetime ISA allowance.

Why have we introduced this cut-off date?

We anticipate increasing levels of demand for transfers in the run up to the tax year end. As it can take up to 30 days for ISA funds to be transferred between providers, we want to ensure that customers’ requests can be processed in time to avoid disappointment."

Duggary

Thanks for the advice

Alextom

Hi,
If I wanted to buy a house in the 13th month of opening my LISA, could I deposit the full yearly allowance of £4K in the first month of the second year and claim the £2k bonus straight away? That's considering I did deposit the full £4K in the first year too of course.
Thanks!