Lifetime ISAs guide

msha

LISA investment in stocks & share accounts can be oriented towards generating monthly income or towards capital growth. If I chose monthly income route, do I:
1. Get paid the monthly income into my current bank account or does it have to stay in the LISA account?
2. Do I have to pay tax on this monthly income?

Thanks
Imran

Alexland

msha wrote: »

LISA investment in stocks & share accounts can be oriented towards generating monthly income or towards capital growth. If I chose monthly income route, do I:
1. Get paid the monthly income into my current bank account or does it have to stay in the LISA account?
2. Do I have to pay tax on this monthly income?

Investment income would stay within the LISA wrapper (and may get automatically reinvested depending on your platform choice and settings) and is not subject to income tax. If you wanted to withdraw the money into your bank account before age 60 it would be subject to the normal early access penalty.

Alex

Lehane

I've had a help to buy since they opened so now have £8k in it. Unfortunately I've just moved to Hertfordshire from Yorkshire and discovered nothing costs less than £250k!

I don't think I'll be buying until 2020, so am I right in thinking I could open a LISA, transfer £4k this year, and £4k in April? Then transfer the remaining over in April 2020?

If I do that, can I continue to save £200 per month into the help to buy? By 2020 I'll have hit the £12k threshold so April 2020 I would transfer the final £4k. I can then save into another account and if I get to 2021 put another £4k in.

Does that make sense? Is it correct? Thanks in advance.

(my other alternative is to move back up north!)

masonic

Lehane wrote: »

I've had a help to buy since they opened so now have £8k in it. Unfortunately I've just moved to Hertfordshire from Yorkshire and discovered nothing costs less than £250k!

I don't think I'll be buying until 2020, so am I right in thinking I could open a LISA, transfer £4k this year, and £4k in April? Then transfer the remaining over in April 2020?

If I do that, can I continue to save £200 per month into the help to buy? By 2020 I'll have hit the £12k threshold so April 2020 I would transfer the final £4k. I can then save into another account and if I get to 2021 put another £4k in.

Does that make sense? Is it correct? Thanks in advance.

Yes you can do as you suggest, and can continue paying into the HTB ISA throughout.

(my other alternative is to move back up north!)

I wouldn't dismiss that option out of hand

ReubenHeyburn

Hello.

I have just opened a Lifetime Isa. when i come to buy my first house in a few years, can i use my lifetime isa balance and additional money for my house deposit or only my lifetime isa?

bowlhead99

ReubenHeyburn wrote: »

Hello.

I have just opened a Lifetime Isa. when i come to buy my first house in a few years, can i use my lifetime isa balance and additional money for my house deposit or only my lifetime isa?

You can use as much non-lifetime-isa money as you like, alongside the money you take out of the lifetime isa, to buy the property (or to put a deposit on buying the property)

Alexland

bowlhead99 wrote: »

You can use as much non-lifetime-isa money as you like, alongside the money you take out of the lifetime isa, to buy the property (or to put a deposit on buying the property)

Within reason because of course a LISA property purchase must be supported by a mortgage.

Alex

rachlikeswinter

Alexland wrote: »

Within reason because of course a LISA property purchase must be supported by a mortgage.

Alex

Is that so? I don't think I knew that.


Obviously I'm not going to save £300k+ to buy a house outright in the next several (thousand) years so it's moot, but interesting.

Alexland

rachlikeswinter wrote: »

Is that so? I don't think I knew that.

If it's not true they should probably remove it as a mandatory requirement from all the government released information about buying property with LISAs...

https://www.gov.uk/lifetime-isa

greenglide

It is the same as the HTB ISA in this respect, isnt it. You have to take out a mortgage, even if it is just £1.