Lifetime ISAs guide

mpnmerro

One last question: with LISA is it true you cannot rent the house but must live in it?

eskbanker

mpnmerro wrote: »

One last question: with LISA is it true you cannot rent the house but must live in it?

LISA is the same as HTB on this, i.e. you have to occupy the property as your main residence, at least to start with, but they won't reclaim bonuses if you later rent it out because of a change in circumstances: https://blog.moneysavingexpert.com/2016/04/can-you-rent-out-a-home-bought-with-a-help-to-buy-isalifetime-isa/

rachellensmith

First time poster!

I have a Skipton LISA which has a government 'bonus' paid into each month. I received a cheque which I cashed into my nationwide account today, and want to transfer some of this cheque into my LISA. Do I need to do this transfer before 5th April (any certain time deadline, like midnight or 12pm?) or because I get a monthly 'bonus', does this not apply?

Look forward to your reply!

eskbanker

rachellensmith wrote: »

I have a Skipton LISA which has a government 'bonus' paid into each month. I received a cheque which I cashed into my nationwide account today, and want to transfer some of this cheque into my LISA. Do I need to do this transfer before 5th April (any certain time deadline, like midnight or 12pm?) or because I get a monthly 'bonus', does this not apply?

How much have you paid into the LISA since 6 April 2018, i.e. do you have enough spare capacity in your £4K allowance if you've been paying in monthly?

If there's headroom to pay in some of the cheque proceeds and you want that to go against your 2018/19 LISA allowance of £4K then you need to get it paid into the LISA by close of play on Friday, but if you miss that or if there isn't enough spare capacity then it's not a problem if it goes in after the 5th (it would then count towards your 2019/20 allowance) - LISA contributions can be made whenever you like, subject to the overall annual allowance....

masonic

rachellensmith wrote: »

I have a Skipton LISA which has a government 'bonus' paid into each month. I received a cheque which I cashed into my nationwide account today, and want to transfer some of this cheque into my LISA. Do I need to do this transfer before 5th April (any certain time deadline, like midnight or 12pm?) or because I get a monthly 'bonus', does this not apply?

If you want to preserve your £4,000 LISA allowance (and £20,000 ISA allowance) from the next tax year then you should make sure you transfer into your LISA before the end of this tax year.

According to Nationwide's cheque clearing calculator the money won't be available until 5th April. If Skipton accept faster payments then this should not be an issue, but you should aim to do your transfer as early as possible since FP can sometimes be delayed (there's a chance it could be delayed until the next working day - in which case it would be too late - but this is very unlikely)

rachellensmith

eskbanker wrote: »

How much have you paid into the LISA since 6 April 2018, i.e. do you have enough spare capacity in your £4K allowance if you've been paying in monthly?

If there's headroom to pay in some of the cheque proceeds and you want that to go against your 2018/19 LISA allowance of £4K then you need to get it paid into the LISA by close of play on Friday, but if you miss that or if there isn't enough spare capacity then it's not a problem if it goes in after the 5th (it would then count towards your 2019/20 allowance) - LISA contributions can be made whenever you like, subject to the overall annual allowance....

Thank you for that, I only opened the LISA in January so only have 1k in there atm. Was looking at transferring 3k into the LISA by 5th April (fingers crossed if the cheque clears in time) then add another 4k after this date. Then was looking at placing the remaining money into a standard ISA or savings account but need to look further into that. Just need to get this LISA deadline sorted first!

rachellensmith

masonic wrote: »

If you want to preserve your £4,000 LISA allowance (and £20,000 ISA allowance) from the next tax year then you should make sure you transfer into your LISA before the end of this tax year.

According to Nationwide's]cheque clearing calculator the money won't be available until 5th April. If Skipton accept faster payments then this should not be an issue, but you should aim to do your transfer as early as possible since FP can sometimes be delayed (there's a chance it could be delayed until the next working day - in which case it would be too late - but this is very unlikely)

I will do that definitely, if the money clears in time! Will look at ISAs tomorrow too, hopefully it is the end of the day 5th April, but will keep an eye out

mpnmerro

eskbanker wrote: »

LISA is the same as HTB on this, i.e. you have to occupy the property as your main residence, at least to start with, but they won't reclaim bonuses if you later rent it out because of a change in circumstances:

You're a sender of good news to me, thanks! My intent is to get a house to live in BUT life is unpredictable so I feared I'm stuck forever if I'm not ever allowed to rent it in most exceptional circumstances.

One more thing: I hear about Equity Loan (EL), which I consider to combine with LISA. I read that with EL you definitely cannot rent, so I need to be careful there, is that right?

eskbanker

mpnmerro wrote: »

One more thing: I hear about Equity Loan (EL), which I consider to combine with LISA. I read that with EL you definitely cannot rent, so I need to be careful there, is that right?

I'm not particularly familiar with the rules of the government's Help To Buy: Equity Loan scheme (assuming that's what you're referring to) but a quick look at https://www.helptobuy.gov.uk/wp-content/uploads/Help-to-Buy-Buyers-Guide-Feb-2018-FINAL.pdf does unearth:

Q Can I sublet my Help to Buy home?
No. Help to Buy is designed to assist you to move on to or up the housing ladder. If you wish to sublet, you will first have to repay the Help to Buy equity loan assistance.

Even if you don't use that scheme, then renting out a house that you bought with a residential mortgage entails changing the terms of that mortgage, so there are always going to be complications for those choosing to do that (rather than simply buying another house to live in), but if you concentrate on walking before you run you should be OK!

Agius

Hi, looking to open a lifetime ISA to use bonus towards house purchase, looking to buy in 12 months time when I have further years self-employed accounts for mortgage application purposes, is there any benefit in opening a LISA before 6th April with 4K lump sum then further 4K on 6th April. Have invested no more than 10k in a cash ISA to date this tax year. Thanks in advance for any advice.