Lifetime ISA (LISA) 12 month time limit

MAB_90

I have a question regarding the 12 month deadline required for the LISA to be open before purchasing a property. I initially opened a LISA in Jan 2019 but withdrew all the funds in May 2020 following the COVID pandemic as I needed the money (no penalty suffered here following the Gov’s relaxation of the withdrawal penalty rules). Finding the funds again, I now intend to put the money back into the ISA this month (March 2021) however my concern is whether the 12 month rule to use the bonus operates from Jan 2019 when I initially opened the ISA or from March 2021; and whether I will have to wait until April 2021 to use the bonus purchase or not. Any help from anyone who's in a similar position or knows better would be much appreciated.

Thanks

Alexland

Was the account closed? Will you be contributing to the same account?

MAB_90

Didn't go through a formal closure. Only just emptied the account and yes it will be the same account i'll be contributing to. Just not sure whether reducing the balance to nil would render it inactive in some way/time would reset or not.

masonic

If the account is still open, then the opening date is the opening date. Bear in mind that any money you contributed between 6th April 2020 and the date you withdrew the balance will count towards the £4k annual allowance.

Alexland

In which case you should be fine if the provider's systems still allows you to contribute into the account. I haven't seen anything in the rules that would restart the clock because the account was temporarily empty. You might still want to send a message to the provider to get their response in writing.

MAB_90

Thought just as much. I've emailed them so hopefully i get reply soon. Thanks 

MAB_90

Confirmed. Their reply - "The 12 month period begins from when you made your first payment into the account (e.g. 5th March 2020), so your account will mature on the 5th March 2021, and after that point regardless of withdrawals you have made, you will be able to use your account for a house purchase".