Lifetime ISAs guide

1985woody

Hi all
My partner and I are purchasing a house . We have one Help to buy ISA we the solicitors charged £60 to withdraw , but the help to buy life time ISA they are trying to charge £150 to withdraw .
Even the lower charge amazes me , but TBF my broker warned me this is normal £60 max . I cannot understand why the life time ISA is £150 , I have questioned it and not paid as I believe they are ‘ trying it on ‘
Any advice ?

eskbanker

1985woody wrote: »

My partner and I are purchasing a house . We have one Help to buy ISA we the solicitors charged £60 to withdraw , but the help to buy life time ISA they are trying to charge £150 to withdraw .
Even the lower charge amazes me , but TBF my broker warned me this is normal £60 max . I cannot understand why the life time ISA is £150 , I have questioned it and not paid as I believe they are ‘ trying it on ‘
Any advice ?

The (maximum) fee for a HTB ISA is spelt out in the scheme rules:

7.12 Conveyancer fees –Bonus Application Work

(A) In respect of the whole of the work that an Eligible Conveyancer undertakes in connection with the purchase of a specific property and that is directly related to:

(i) calculating a Bonus amount under clause 7.4 (Calculation of the Bonus);

(ii) making an application for a Bonus under clause 7.5 (Applying for a Bonus);

(iii) making a Payment Request under clause 7.6 (Payment of the Bonus);

(iv) (if applicable) returning a Bonus to the Administrator under clause 7.7 (Return of Bonus payments to the Administrator); and

(v) providing any notice, information or documents under clause 7.8 (Following completion of the property purchase),

(such work being the “Bonus Application Work”), an Eligible Conveyancer shall not charge more than £50 (exclusive of VAT).

To the best of my knowledge there is no such mandated limit for processing a Lifetime ISA but arguably the work involved is less, because there is no bonus to claim as such and it's largely the completion of declarations, i.e. just the last bullet point of those listed above, so worth challenging them on how much work they actually have to do and the basis for the higher charge.

The overview of what the conveyancer is required to do is published at https://www.gov.uk/guidance/conveyancers-first-time-residential-purchase-with-a-lifetime-isa

System

Do solicitors have an ombudsman or similar to answer / adhere to ? Seems they can get away with what they like most of the time!

masonic

NevvyC wrote: »

Do solicitors have an ombudsman or similar to answer / adhere to ? Seems they can get away with what they like most of the time!

Yes, there is a legal ombudsman service. The usual timescale for first allowing the firm to deal with your complaint applies.

westdillions

My son has just been quoted £400 plus VAT by his solicitor for withdrawing the LISA funds for his first house purchase. This is in addition to the normal conveyancing fees and seems to be rather excessive I'd appreciate comments from others about what solicitors typically charge.

Alexland

It is excessive for comparison the cap on processing a HTB ISA was £50+vat. Unfortunately there is no cap on LISAs but there is free market choice and the solicitor should have included that charge on the estimate if they were told of the additional funding source. Hopefully not too late to select another solicitor. Some would do it for no extra charge.

Curls2208

Hi there!

So I was thinking about the situation I'm in, in life right now and wondered if anyone could advise my hypothetical question.

I have been saving for a house for years, maxmising out everything the help to buy offered before moving it to LISA. Which gives me currently almost £16,000 in the Skipton Lisa.

Lovely lovely.

Anyway, over the next three years I most likely won't be buying as I'm working abroad and drifting my way through life. Which would give me another £15,000 making it £31,000.

However when I return I'll most likely buy.....however, there is another scenario in my head.

Move abroad properly. Most likely to New Zealand if I could get a job out there.

So here is my question. Would I be penalised by the UK government with the 25% reductions if I were to do this do you think? Or would I be able to get in touch with the correct authorities and have my LISA closed as a special circumstance. I of course would be prepared to lose4 the bonus' I have made through the LISA. But I would not have bought a first home, and If I were to move abroad I'd like to buy my first home out there with that money I had saved....Of course without taking the 25% hit of all money I had put in.

Otherwise It'd be returning to the UK, buying a home.....selling it on quickly or renting it out and then moving abroad.

If the case is I'd lose the Bonus and 25 % of what I'd put in, there may even be a case for buying somewhere back home near my parent's. Having it as my home 'base' for a few years and living out of it when I go back, with parents checking up on it. And then renting it out after the period you need to for a first time buyer to live in.

sully1311

There are no special circumstances except if you’re terminally ill.

You will need to accept the penalty I’m afraid. The house purchase must be in the U.K.

Curls2208

Looks Like If I do genuinely start to believe I may not want to live in the UK I'll have to come up with a plan then, thanks for the Advice. It begs the question do I stick another 12K in over the next few years, or start saving that money elsewhere!

Still that extra 3K would probably cover solicitor fee's and things for 2 hours moves, so buying in the UK and 'living' in it for a year may not be the worst solution.

eskbanker

Curls2208 wrote: »

without taking the 25% hit of all money I had put in.

[...]

I'd lose the Bonus and 25 % of what I'd put in

Just to be clear, the LISA withdrawal penalty is 25% of what you take out, which will equate to the bonus plus 6.25% of what you put in.

So, if hypothetically you withdrew £15K (without it qualifying for penalty-free withdrawal), that would comprise £12K of what you paid in plus £3K bonus, so the penalty would be £3,750, not £7K.