Lifetime ISAs guide

sofa_searcher

eskbanker wrote: »

As per your first sentence, it's only valid if the £3999 comes specifically from pre-2017/18 contributions to a HTB ISA (do you actually have one?).

If it doesn't, you can transfer the £3999 from somewhere else to give a LISA balance of £4000 by 5 April 2018 and then add another £4000 on 6 April 2018 to achieve your £8000 balance, with the first £1000 bonus paid around the end of April 2018 and then another £1000 bonus paid around the end of May 2018.

Also is there a restriction to renting rooms out as a live-in landlord?

eskbanker

sofa_searcher wrote: »

Also is there a restriction to renting rooms out as a live-in landlord?

The conditions, as per https://lifetimeisa.campaign.gov.uk/ are:

The home you buy must:

• be in the UK
• have a price of £450,000 or less
• be the only home you will own
• be where you intend to live
• be purchased with a mortgage

Ewert

Hi All,

I have a question about the investment LISA: if you are looking to save up the maximum amount of £4000 and the value of your investments drops, will you still be able to get the £1000?

eskbanker

Ewert wrote: »

Hi All,

I have a question about the investment LISA: if you are looking to save up the maximum amount of £4000 and the value of your investments drops, will you still be able to get the £1000?

The bonus is contribution-based, or in other words is paid at 25% of whatever you pay in (up to £4K/year) - whether it increases or decreases after that is irrelevant.

Amarks552

Hi all,

This is my first post on the MSE forums and a question i have been asking myself for a few months.

- I opened a LISA in June and deposited £1
- I have a HTB ISA with 3.5k in

- If I transfer my HTB before 5th April 2018 to my LISA I will receive a 25% bonus on that amount
- If I deposit 4k in the LISA before 5th April 2018 I will receive 25% bonus on that amount

The question
If I then deposit 4k in the LISA on 7th April 2018 will I receive 25% bonus on 11.5k at the end of May given in the 18/19 tax year the bonus is paid monthly and I would have deposited the max amount for the year in the first month.

This would be fantastic if it was right but I just want to make sure before I go ahead and put these sort of figures into a house deposit goal.

Thanks all for your help.
Adam

eskbanker

It's only HTB contributions from before this tax year that are outside the £4K LISA annual limit, so if all of your £3500 was from 16/17 or before then your plan above works as is.

However, if any of the £3500 in the HTB has been paid in since 6 April 2017 then you need to adjust your LISA contributions accordingly.

Amarks552

Thanks very much for the quick reply.

Indeed I haven't deposited anything since 6 April.

Do you agree that I would receive the 25% bonus on 11.5k given the way the LISA bonus works in the second year?

Thanks

Ed-1

Amarks552 wrote: »

Thanks very much for the quick reply.

Indeed I haven't deposited anything since 6 April.

Do you agree that I would receive the 25% bonus on 11.5k given the way the LISA bonus works in the second year?

Thanks

Yes................

Amarks552

I was pondering something this morning concerning the deposit one would putting down on a house and the targeted LTV. If I am targeting a house purchase of 130k with a 10% deposit with 15k in a LISA what would happen to the surplus 2k. Would this automatically be:

1. Used to reduce the size of the mortgage (what i believe the HTB bonus achieves?)
2. Increase the deposit therefore reducing LTV
3. Remain in the account to use foe retirement

If 3. above it would make sense to me that someone on a work pension plan (given this would likely trump the LISA pension use) should calculate their LISA value according to their house deposit to the nearest pound possible, as otherwise it would be money that could have been used on other costs ie fees etc (admittedly some of this would be bonus)

It would be great to hear thoughts as I can't recall reading about it anywhere

Boosh

I'm opening a LISA with Hargreaves Lansdown today and it'd be great to get a bit of guidance on which option is generally better for how any income is treated - the two options are 'Held on account' or 'Automatically re-invested' (both explained below). I assume re-investing is more profitable long term but holding on account short-term seems to prevent the charges/commission. Any advice? Thanks

-

Held on account

The income can be held pending your instructions, in which case any income will remain within your account but we will not invest it until you tell us to do so.

Automatically re-invested

We will reinvest any income automatically for you when it reaches £10 (or your chosen minimum) per holding. Automatic reinvestments take place between the 11th and 21st of the month and are charged at 1%, minimum £1, maximum £10. Please remember stockbroking commission applies to income reinvestments for shares and other investments.