Lifetime ISA Bonus - taxable? do I need to declare as interest for purposes of Tax Credits renewal?

ffurdoow

I have had conflicting advice about my LISA (Lifetime ISA) 25% bonus and whether or not it needs declaring on my tax credits renewal. Does anyone know if I need to declare it? The tax credits people seemed confused when I asked them and told me I did need to declare it, but they seemed unsure. I am on the old tax credits system rather than universal credits, so whilst it affects my savings balance when the bonus goes in, I'm not sure if it is taxable income as such that counts towards my earnings and income? Thanks. 

calcotti

ISA income is not taxable - that's the point of an ISA. As it is not taxable it is ignored for tax credits.

whizzywoo

It seems that only taxable income from investments needs to be included as income on a tax credits claim:
https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/what-is-income/investment-income/
There's a whole load of other stuff disregarded but this sentence refers to ISAs - it's the 6th bullet point coming after "The following are disregarded:
interest and dividends etc under Individual Savings Accounts (ISAs) including interest on cash deposits on which the account manager is liable to tax under the Individual Savings Account Regulations 1998 (SI 1998/1870), reg 23;"