Lifetime ISAs guide

eskbanker

weller96c wrote: »

Question:
After the 6th April I can pay in another £4000 into my LISA for that year. But will there be any penalty if I use the account to buy my house after June 6th?

Answer:
No, assuming that the significance of June 6th is that it's the anniversary of you opening the LISA, then you can use the money (which should include the 2018/19 bonus by then if you pay in within a month of the start of the new tax year) anytime thereafter for a qualifying first-time property purchase without penalty.

weller96c

eskbanker wrote: »

Answer:
No, assuming that the significance of June 6th is that it's the anniversary of you opening the LISA, then you can use the money (which should include the 2018/19 bonus by then if you pay in within a month of the start of the new tax year) anytime thereafter for a qualifying first-time property purchase without penalty.

Awesome, Thanks so much!! I Really appreciate the reply.

dcs34

Hi guys

Am I correct in thinking that, given the ISA allowance resets every 6th April, that I only need to pay the £4,000 on the 5th April before it to get that years 25% bonus?

Just thinking that next year for example (2018/19), as I don't necessarily want to transfer the money into my Skipton LISA straight away on 6th April 18, where it earns 0.75% interest, and instead keep it in a current account earning 2-5% for as long as possible, and just transfer it in on the 5th April 19 and still get that year's extra £1,000.

Alexland

dcs34 wrote: »

Am I correct in thinking that, given the ISA allowance resets every 6th April, that I only need to pay the £4,000 on the 5th April before it to get that years 25% bonus?

Just thinking that next year for example (2018/19), as I don't necessarily want to transfer the money into my Skipton LISA straight away on 6th April 18, where it earns 0.75% interest, and instead keep it in a current account earning 2-5% for as long as possible, and just transfer it in on the 5th April 19 and still get that year's extra £1,000.

Yes you can earn a better return elsewhere so it makes sense to make the £4k LISA contribution towards the end of the tax year. However I would suggest you get it in a few weeks before the end of the tax year in case unexpected contribution issues occur and cause you to lose the bonus opportunity.

Also, as you are with Skipton then I assume you are using the LISA for a house purchase, remember to leave enough time for the bonus to be paid before asking your solicitor to draw the money out of the account. So in the final tax year of your house LISA contributions you might want to make the contribution earlier rather than later.

Alex

femster82

Hi,

Skipton told me today is the deadline to transfer my HTB and open a new LISA with them.

So I have a Halifax HTB ISA with over £6k in there including £2k this tax year. I was planning on buying later this year but not a guarantee of course. But I know my house price is likely to be over the £250k outside London limit so I would lose my HTB bonus anyway.

Should I transfer the money or just leave it?

eskbanker

As you've seen, you can't get a HTB bonus for a property purchase above £250K outside London.

However, if you're planning on buying this year and don't yet have a LISA (as implied by your post), you'd lose out on a bonus there too as a LISA has to be open for 12 months before penalty-free withdrawal (which would actually lose yo more than just the bonus).

Have you already opened the LISA?

System

epm-84 wrote: »

Click on the link to show recent transactions within your Lifetime ISA and under 'more account details' it shows remaining ISA allowance information for 17/18 tax year.

Got it, thanks! Mine isn't showing any of my H2B interest ...

Was hoping it may have a remaining allowance figure for the tax year LISA limit too, going to call up to get a more specific figure ASAP

josephibbs93

Apologies if this has already been answered...

I opened up a Cash LISA with Skipton back in June 2017, when it allowed applications. I transferred in from a Virgin H2B ISA, which from April-June had 'eaten up' £400 of my £4000 allowance for the 2017/18 tax year. The transfer also included some ~£14 in interest. If I go and check Skipton now, it says that my ISA limit for 2017/18 is £19,600, and not £19,600 - ~£14 of interest. This surely means I can still top up by £3,600 before the end of the 2017/18 tax year? I will then another £4,000 on the first day of the 2018/19 tax year giving me the maximum balance ahead of receiving the bonus. When is the bonus paid too?

Ed-1

josephibbs93 wrote: »

Apologies if this has already been answered...

I opened up a Cash LISA with Skipton back in June 2017, when it allowed applications. I transferred in from a Virgin H2B ISA, which from April-June had 'eaten up' £400 of my £4000 allowance for the 2017/18 tax year. The transfer also included some ~£14 in interest. If I go and check Skipton now, it says that my ISA limit for 2017/18 is £19,600, and not £19,600 - ~£14 of interest. This surely means I can still top up by £3,600 before the end of the 2017/18 tax year? I will then another £4,000 on the first day of the 2018/19 tax year giving me the maximum balance ahead of receiving the bonus. When is the bonus paid too?

It probably does in practice but interest wouldn't count as a current year ISA subscription anyway (even if it did count as a LISA subscription). Interest earned within an ISA wrapper can never count as an ISA subscription.

josephibbs93

Ed-1 wrote: »

It probably does it practice but interest wouldn't count as a current year ISA subscription anyway (even if it did count as a LISA subscripotion). Interest earned within an ISA wrapper can never count as an ISA subscription.

Great! Thanks for this.

Also, you have to have the account open for one year before you can use the bonus for buying a first time home. How will this actually work? Once I've had it open for a year and the bonus has been paid on the full balance, I just tell my solicitor that I would like to use this as part of the mortgage deposit?