LISA - different persons bank

adjusy

Hi,

Me and my girlfriend are looking to buy a house in the next few years, I am not eligible for a LISA but she is. So she's now got a LISA, but when making a deposit, can I deposit from my bank account instead of hers? She doesn't have any money to deposit but I have a few thousand saved so would like to deposit my from account if possible? Wasn't sure if the source of the funds had to be the same person or not.

Thanks for the help!

bowlhead99

If you gift her the money to put into her lifetime Individual Savings Account, then she is very welcome to put it into her LISA account if she would like to. The funds are implicitly sourced from her, if it's her money which you gave to her. The earlier source of the funds (you) is irrelevant for eligibility for LISA deposits and bonuses etc.

Or do you mean you will loan her the money so she can put her money which she has borrowed from you, into her account? In that case it is still her money and she can still do what she likes with it. Obviously if it's a loan rather than a gift, she still owesyou that amount of money back, just like if she had borrowed the money from a bank or overdraft facility to max out her LISA; you might like to have a documented agreement for that so that she doesn't 'accidentally' keep the money for herself when you split up and go your separate ways. But from the bank's perspective it's still her money which she chooses to put into her ISA. Her arrangement to pay you back if the relationship goes south is not something the bank will be bothered about, in letting her make a LISA contribution with it.

Obviously there are a few things that come to mind with this arrangement (say it's £1000):

If you split up, you may want the £1000 back rather than wanting it to be a gift. So it's probably a loan and you should probably document it that way.

If you do want it back at the time you are buying a house after she's put it into a LISA and it got 25% bigger, you will probably want £1250 back for every £1000 you originally gave her. Or at least to take £1125 back and leave her with some of the free money too. But if you charge her interest, it will be taxable. However maybe she could do something else for you instead of paying you interest, like giving you a similar £1000 back that you put into your pension and get tax relief on it. But then you (combined) don't get to use it on property. Still, there are probably plenty of family and friends who lend each other money, charge each other a bit of interest, but don't actually report it to HMRC.

If you split up before buying the house, you will want your £1000 back but she can't get it without taking it out of her LISA, which will cost her a penalty. Are you happy that she pay you back less? When actually she might just pay you back the 'less' from her own pocket and keep the full £1250 invested...

I guess you can just see the £250 as 'free money' that you couldn't have got yourself (due to lack of availability of a LISA at your age) so you are not bothered if you get only £1000 back (or a bit less) if it all goes titsup.

adjusy

Thanks for that, I appreciate the help. There is an ability to deposit via a bank card in her online account so was wondering if that would be possible using my bank card. Not sure whether that would be classed as gifting it.

100% agree, it is a risk, but not life changing money so I should be okay if it goes titsup. I like to think I would see money back from the 'loan' however!

bowlhead99

You could try depositing it using your bank card directly to her account but usually peoples banks are expecting money that arrives in a personal account using a card facility to be coming from a card belonging to the account holder.

Either way, whether you deposit it with a card or you transfer it over to a current account of hers via electronic transfer and then she deposits it - the process involves you paying money over to an account that she owns and controls. If you are happy to do that, you could try having her log in and key your card details in, but it is probably just as easy to send her some cash online yourself which takes less than a minute and then she can use it to pad her LISA out or get her nails done or whatever. If you paid it direct to her LISA (if the bank's functionality allows it) she could still withdraw it and get her nails done

As you say, a few grand is not life changing money but if you are still 'a few years' from being ready to buy together, no harm in sending her something to sign to say the £x received from you on x date is for the purpose of your joint deposit on a property purchase and she agrees you can have it back in 2025 if you haven't bought by then.

Doesn't sound very romantic does it, but you could always sneak it into an email that she'll be replying to for some other reason and then you've got it documented that you both knew why it was being paid. For example when she gets hit by a bus next week and her family don't know it's your money and think you are trying to take advantage of their grief by claiming several thousand pounds from her estate.

Like I said, not very romantic, but practical

adjusy

Just wanted to say a quick thanks again, worked fine depositing via my own bank account. The advice was very helpful, especially the email