Help! Lifetime ISA - withdrawing funds on completion at 12 months

macys

Hello all,
We took out a LISA each with Skipton on 6th of June 2019 and put in £1 to get the clock ticking. Unexpectedly the perfect house for us came on the market, and we made an offer which has just been accepted. It is a part-exchanged property which is being sold by Taylor Wimpey. They want to exchange in 28 days, but completion will take place in June/July 2020. 

My question is: assuming we pay £3999 each this financial year into our LISA's and pay another £4000 on the 6th of April, would we be elegible to withdraw the 20k penalty free on completion in June/July (as this is when the LISAs will have been opened for 12 months) rather than on exchange? 

Thank you for your help.

Alexland

If you have enough money in normal accounts too pay for the initial costs and exchange deposit then yes your solicitor wouldn't need to withdraw from the LISA until before completion after 6th June 2020 by which time the accounts will be 12 months old and the second bonus relating to the start of tax year contribution should have been added into the account. I wouldn't set completion date too tightly as there may be unexpected delays in drawing the money.

macys

Alexland said:

If you have enough money in normal accounts too pay for the initial costs and exchange deposit then yes your solicitor wouldn't need to withdraw from the LISA until before completion after 6th June 2020 by which time the accounts will be 12 months old and the second bonus relating to the start of tax year contribution should have been added into the account. I wouldn't set completion date too tightly as there may be unexpected delays in drawing the money.

Thank you Alex for your reply! Much appreciated. We do have a 20% deposit, so we will pay 10% on exchange and 10% on completion. I didn't want to lock away 16k without knowing that the money and bonus could go towards completion (info I found online suggested that the funds could only be used on exchange!!). Will try to push completion a bit towards the end of June/beginning of July to be on the safe side.

Alexland

Where did you see the solicitor LISA withdrawal could ONLY be used for exchange? Often LISA articles say the withdrawal can be used for exchange as that is not possible with a HTB ISA bonus. A good solicitor should help you plan the cash flow required to support the purchase.