Using a LISA to buy someone out of a mortgage

GranpaChook

Hiya,
I am currently living in a house owned by my girlfriend and her brother who have a joint mortgage together. I am a first time buyer with a LISA and I wondered what the rule are around using that to buy her brother out as he wants to move. I know there are numerous restrictions around using a LISA but I cannot find anything concrete about this scenario.  Essentially, can I buy him out and use my LISA to do so?
Thank you for your help

Alexland

Provided it's a properly conveyanced transaction with solicitors and meets the rules of the scheme it should be fine.

masonic

I'm struggling to see how this could be a qualifying transaction if your girlfriend is to keep her share in the property throughout. Perhaps there is something clever you can do, such as have her sign it all over to him, and then you could jointly buy it from him, but that seems rather risky. See below

Alexland

masonic said:

I'm struggling to see how this could be a qualifying transaction if your girlfriend is to keep her share in the property throughout. Perhaps there is something clever you can do, such as have her sign it all over to him, and then you could jointly buy it from him, but that seems rather risky.

OP would need to talk to a solicitor to understand the mechanics of the legal transaction but I dont see why there would be no way in law to achieve this?

masonic

Alexland said:

masonic said:

I'm struggling to see how this could be a qualifying transaction if your girlfriend is to keep her share in the property throughout. Perhaps there is something clever you can do, such as have her sign it all over to him, and then you could jointly buy it from him, but that seems rather risky.

OP would need to talk to a solicitor to understand the mechanics of the legal transaction but I dont see why there would be no way in law to achieve this?

In fact the situation is much simpler than I had first thought...

The Individual Savings Account (Amendment No. 2) Regulations 2017, regulation 31, paragraph 6(4) states:

"The account investor must be purchasing as sole owner or as joint owner with another individual who may already own the property."

https://www.legislation.gov.uk/uksi/2017/466/regulation/31/made

There can be no confusion over what that clause means, due to the definition of the purchase price in paragraph 7, which is

"(d) in connection with the acquisition of a legal interest in land by an individual who as a result of the acquisition becomes a joint owner of the land with another individual who previously owned the land, the market value of the whole of the land as determined at the time of the acquisition;"

GranpaChook

Many thanks for your help guys!