Lifetime ISAs guide

Alexland

Yes your solicitors will need to apply to Skipton to make a withdrawal for a qualifying property purchase and Skipton have previously advised to allow an additional 1 month (on top of the required 12 months from the initial contribution date) for this process.

If you are looking to complete anytime soon then I assume you opened your LISA elsewhere in April 2017 and then transferred into Skipton as they did not have the LISA product available at launch so you couldn't have done the 12 months with Skipton yet?

Alex.

Sussex_Dave

Thanks

Yes I opened a Nutmeg account when the LISA's launched in April and opened with Skipton when they launched the cash lisa. Skipton advised the Nutmeg date will be honoured. The solicitors had no idea about the LISA until I raised it. I'm now in a place where I'm driving them to understand the process. All very frustrating. I've found the declaration form myself and the one they need to submit too.
I may invoice them for consulting fees as this will help them with future clients!

Alexland

Are they charging you extra for processing the LISA as an additional funding source? Under the HTB ISA the extra fee was capped at £50+vat.

Sussex_Dave

Alexland wrote: »

Are they charging you extra for processing the LISA as an additional funding source? Under the HTB ISA the extra fee was capped at £50+vat.

They are currently under the impression they don't have to do anything so no charges have been mentioned. I've been researching it thoroughly today though and sent them various links which make it very clear that they need to. I will certainly challenge any fee considering I've done so much groundwork for them. I've not agreed exchange as this has a dependency on the LISA payment...

Sussex_Dave

Sussex_Dave wrote: »

They are currently under the impression they don't have to do anything so no charges have been mentioned. I've been researching it thoroughly today though and sent them various links which make it very clear that they need to. I will certainly challenge any fee considering I've done so much groundwork for them. I've not agreed exchange as this has a dependency on the LISA payment...

I'm so confused on this. The section on money saving expert appears to have been updated from initial launch which advised you could open a LISA (stocks and shares) to start the count and then transfer to a Cash LISA once launched and then use these funds to claim the bonus and that the original LISA date would drive the 12 months (new LISA provider honour this). It now states which conflicts with the initial recommendation:

"It's worth bearing in mind that if you open multiple LISAs, each one needs to have been open for more than 12 months to qualify. However, there's a way around this. Simply transfer all the money into the oldest one before you buy !!!8211; then it all counts."

There is then a government LISA campaign website which once again conflicts the statement on money saving expert:

"To be able to be eligible for the government bonus, you must have opened a Lifetime ISA at least 12 months ago."

I have agreed to buy in May using my Skipton ISA having opened a Nutmeg in April to 'start the count'. I was of course and continue to expect the bonus to be paid as it is 1 year since I opened a LISA account.

Statement just taken from Skipton website: To do this, you must instruct your conveyancer to use your Lifetime ISA to buy your first home from 12 months after opening it. If you've transferred a Lifetime ISA to us, this period starts from the date you originally opened your Lifetime ISA.

So much ambiguous information out there around this. No wonder so many providers were scared to sign up...

Thanks
Dave

eskbanker

Not sure I see any ambiguity from all those extracts to be honest, but are you perhaps confusing the requirement for an elapsed year between first LISA opening and purchase with the (separate) bonus payment arrangements?

Unlike the HTB scheme, LISA bonuses are paid throughout the period the account is held, rather than a one-off claim at the end, although this distinction is less apparent with early adopters, given the lack of LISA bonus payments until the start of 2018/19.

Anyone paying into a LISA at any time during 2017/18 will receive a bonus within the next few weeks, regardless of when they plan to purchase a property, and anyone starting a LISA now (or continuing to pay into one) will receive a bonus within a few weeks, rather than having to wait until the next tax year.

I imagine that updating the MSE article was intended to clarify this (planned and announced on day one) change in bonus payment scheduling from annual to monthly.

However, the rule about a minimum of a year from first opening a LISA to using it for a first-time property purchase continues to apply.

Sussex_Dave

eskbanker wrote: »

Not sure I see any ambiguity from all those extracts to be honest, but are you perhaps confusing the requirement for an elapsed year between first LISA opening and purchase with the (separate) bonus payment arrangements?

Unlike the HTB scheme, LISA bonuses are paid throughout the period the account is held, rather than a one-off claim at the end, although this distinction is less apparent with early adopters, given the lack of LISA bonus payments until the start of 2018/19.

Anyone paying into a LISA at any time during 2017/18 will receive a bonus within the next few weeks, regardless of when they plan to purchase a property, and anyone starting a LISA now (or continuing to pay into one) will receive a bonus within a few weeks, rather than having to wait until the next tax year.

I imagine that updating the MSE article was intended to clarify this (planned and announced on day one) change in bonus payment scheduling from annual to monthly.

However, the rule about a minimum of a year from first opening a LISA to using it for a first-time property purchase continues to apply.

Thanks. Maybe I am. So in your opinion when I complete mid May 18, then I will not have 25% of my LISA pot subtracted as I first opened a LISA in April 2017.

When I spoke with Skipton previously they said they honour the Nutmeg April ISA date and on speaking with someone else in Skipton today re the declaration, they advised I would receive a 25% deduction if I draw down for purchase via solicitor before 12 months has past from my Skipton account open date which was in June 17. I then escalated this to a manager who said I wouldn't received the deduction as the 12 month coutn started in April.

I'm so lost with this which isn't helped by my solicitor having no understanding or processes in place for management of the LISA. I've finally got them to accept responsibility after many emails, phone calls and web links.

I wasn't planning on buying until the summer but the right house at the right price has come up making understanding this all the more important.
I just want to make sure I don't lose the bonus as all my HTB ISA pot also sits in the LISA too...

So anything (HTB transfer, funds paid into LISA) in my Skipton pot including the bonus will be transferred to my solicitor in Mid May without a deduction?

eskbanker

Sussex_Dave wrote: »

When I spoke with Skipton previously they said they honour the Nutmeg April ISA date and on speaking with someone else in Skipton today re the declaration, they advised I would receive a 25% deduction if I draw down for purchase via solicitor before 12 months has past from my Skipton account open date which was in June 17. I then escalated this to a manager who said I wouldn't received the deduction as the 12 month coutn started in April.

As ever, it's best to rely on what's in writing rather than speaking to multiple employees who may or may not know what they're talking about! https://www.skipton.co.uk/savings/isas/lifetime-isa/faqs clearly states:

You can instruct your conveyancer to use your Lifetime ISA to buy your first home from 12 months after opening it. If you’ve transferred a Lifetime ISA to us, this period starts from the date you originally opened your Lifetime ISA.

Sussex_Dave wrote: »

I wasn't planning on buying until the summer but the right house at the right price has come up making understanding this all the more important.
I just want to make sure I don't lose the bonus as all my HTB ISA pot also sits in the LISA too...

So anything (HTB transfer, funds paid into LISA) in my Skipton pot including the bonus will be transferred to my solicitor in Mid May without a deduction?

The same FAQ page also highlights a (maximum) 30 day lead time from paperwork to settlement, which may be an issue if you're cutting it fine:

When you come to buy, you’ll need to tell your conveyancer you want to use part or all of your Skipton Online Cash Lifetime ISA towards the purchase and provide them with a declaration.

Your conveyancer also has to provide us with a declaration. It’s your responsibility to ensure this is provided, but your conveyancer should do this as part of the buying process.

Once we receive the appropriate paperwork from your conveyancer we’ll get in touch with you to confirm the instruction and then pay the amount requested to the conveyancer within 30 days without applying the government withdrawal charge.

Sussex_Dave

eskbanker wrote: »

As ever, it's best to rely on what's in writing rather than speaking to multiple employees who may or may not know what they're talking about! https://www.skipton.co.uk/savings/isas/lifetime-isa/faqs clearly states:

The same FAQ page also highlights a (maximum) 30 day lead time from paperwork to settlement, which may be an issue if you're cutting it fine:

Thanks for that. I now have a response in writing confirming the count started when the LISA was opened in April 17. They are generally very helpful and quick to respond, but I guess the fine details are sometimes lost in the comms/training. At least they know about the LISA unlike my conveyancer.

Completion isn't yet finalised so there will be a dependency on the 30 day lead time.

Thanks again...:)

MG42Maniac

My partner and I both opened up a LISA with Nutmeg Investments on 29th June 2017. The plan was to purchase a new build house with Bloor Homes in July. However, the property developer wants us to adhere to a 28-day exchange window which means we will need to access the LISA funds early to buy our house and they will not have been in the account for a full 12 months. The estimated completion date is June/Jul. However, the LISA funds would be sent directly to our solicitor and used as a deposit on a house worth £440,000. My understanding was that because it has been less than 12 months we will lose out on the government bonus, but because it's being used for a first time house worth less than £450,000 that we would not face a 25% early exit penalty. We've already had to suffer the loss of the bonus due to a forced early withdrawal so I am hoping we will not lose 25% on our original £4000. I've asked Nutmeg and they keep referring it and cannot give me a straight answer. I kinda see the following three outcomes:

1) No exit fee - £4000 sent to the solicitor
2) Fee on original £4000, so £3000 sent to the solicitor
3) Fee on original £4000 + £1000 bonus so £3750 sent to the solicitor.

If it is option #2 that would be gutting, it's probably been asked before by someone else but does anyone have a definitive answer? I rang up HMRC and they did not know and gave me the email address for savings audit team but kinda hoping to get an answer sooner as 28-day timer is ticking.