Keeping LISA when spouse buys a house

3tsp

Hi all,
My wife and I both have LISAs, and we're looking to buy a house. My wife's finances are robust enough for her to be the sole purchaser of a house/the mortgage to be in her name only. Suppose she were to buy a house (and, perhaps, I were to live in it subsequently with her) using her LISA and without my involvement, now. If we were to sell this house at a later date and purchase another house as a joint purchase, could we still then obtain the first time buyer bonus from my LISA?

(More, perhaps relevant information: this isn't just a wheeze - I live/work in Germany currently so it would be actively difficult for me to get a UK mortgage.)

3tsp

(Whoops, I hit send too early. I wanted to say thanks!)

veryintrigued

Is the institution you hold the LISA with aware you live and work outside of the UK?

3tsp

veryintrigued said:

Is the institution you hold the LISA with aware you live and work outside of the UK?

Thanks - yes.

eskbanker

Variations of this question have come up on here before, and I don't recall if it's ever been established conclusively, but there is a line of argument that by virtue of being married to a property owner, you have an interest in that property as it's a marital asset (even when only registered in one name) and therefore can't subsequently claim first time buyer status.

3tsp

eskbanker said:

Variations of this question have come up on here before, and I don't recall if it's ever been established conclusively, but there is a line of argument that by virtue of being married to a property owner, you have an interest in that property as it's a marital asset (even when only registered in one name) and therefore can't subsequently claim first time buyer status.

Thanks - I was sure it wasn't a novel question - it's hard to search for though! That line of reasoning makes sense - though I wonder how it compares to, eg. if someone owned a home pre-marriage to someone who'd never owned somewhere.
I wonder who I'd have to ask for a conclusive answer... 

Amateurretiree

So if a couple plan to buy a house together( not married) and one hasn’t had a mortgage before, can that person have a LISA?

3tsp

Amateurretiree said:

So if a couple plan to buy a house together( not married) and one hasn’t had a mortgage before, can that person have a LISA?

Yes, it appears so - see point 3 under 'Lifetime ISA need-to-knows specifically for first-time buyers' at the moneysavingexpert LISA guide. (I'm not allowed to post links yet, else I'd save you the google!)

Alexland

eskbanker said:

Variations of this question have come up on here before, and I don't recall if it's ever been established conclusively, but there is a line of argument that by virtue of being married to a property owner, you have an interest in that property as it's a marital asset (even when only registered in one name) and therefore can't subsequently claim first time buyer status.

After reading just about every LISA thread since they launched we have never seen anyone come to this forum to complain they were unable to proceed with their penalty free LISA withdrawal when buying with a spouse who wasn't a first time buyer. Either it doesn't happen, the solicitor doesn't stop it or not enough people complain on this forum (don't know where else they would go).

However my understanding is that the law in England and Wales (at least when it applies to divorces) considers matrimonial assets purchased during a marriage as jointly owned by both. This technically might stop the LISA holder truthfully signing the first time buyer investor declaration that ""I do not own, and have never owned..." to support the withdrawal.

https://www.co-oplegalservices.co.uk/media-centre/articles-may-aug-2017/matrimonial-and-non-matrimonial-assets/

"Matrimonial assets typically include things such as the family home, pensions and savings. It doesn’t really matter who put the money forward for these assets or who accumulated the wealth. When you’re married, the law in England and Wales considers that any assets you acquire during the marriage also belong to your husband or wife. So, for example, if you contribute towards a pension during your marriage, your spouse is entitled to a share of it."

The only way to get certainty on this would be to get qualified legal opinion but that would be uneconomic.

Alexland

Amateurretiree said:

So if a couple plan to buy a house together( not married) and one hasn’t had a mortgage before, can that person have a LISA?

Of course even home owners can have LISAs for the purpose of investing until they are age 60+

xylophone

https://www.gov.uk/lifetime-isa
 The wife is a first time buyer  (eligible to use  her LISA) and raises a mortgage in her own name on a  first home to be held in her own name.

The mortgagee might raise queries  as she is neither separated nor divorced and the husband (while having no legal or beneficial interest ) is going to occupy the property with her  from time to time   (but that is a separate matter from using  her LISA).

https://www.onlinemortgageadvisor.co.uk/mortgage-application/so-youre-married-but-want-a-mortgage-in-just-your-name/

• Many lenders aren’t keen on lone applications from two married borrowers, but are usually OK to accept a joint application in the UK, if you’re not in a marriage.
• The key issue is, can your income cover the mortgage? You need to be aware that if your partner isn’t going on the title deeds, a mortgage lender assessing your application may view them as a financial dependent, thus affecting affordability. 
• Your partner not being on the title deeds will also mean that their income can’t be used to calculate the maximum you can afford.

The husband has kept his LISA -  for example he might have decided that he wanted to keep it as retirement savings which would be his right.

His wife later suggests that  her house  is  too small for their needs - he is now living and working in the UK say, and they want to start a family. The husband agrees that he'll forego the "pension"  so as to contribute his LISA to the purchase of a new home for them both.


They decide to obtain a joint mortgage to buy a larger property - it seems to me that he is still a first time buyer of his first home and should therefore be able to use his LISA in a joint purchase.

https://www.moneysavingexpert.com/savings/lifetime-isas/
If you're a first-time buyer making a purchase with someone who's owned before – you can still open one and use it towards a home purchase together.

However there would be no SDLT first time buyer relief?