Transfer LISA to ISA without using allowance?

delpetra

I'd like to perform an in-specie transfer of my AJ Bell S&S LISA to an AJ Bell S&S ISA but I have already used up my £20k allowance this tax year. Because of this, AJ Bell are saying that completing this transfer would push me above the limit and HMRC would get in touch. Is this the case? They seem to be suggesting that it would have to be withdrawn as cash and then reinvested.

I haven't seen any cases of a LISA > ISA transfer so I'm curious if this process is different in any way.

(There's an additional complication of trying to get this to complete before the end of the tax year but I won't go into that...)

eskbanker

I'm not aware of any allowance usage by doing this, but transferring out of a LISA to a non-Lifetime ISA would incur the withdrawal penalty, so in doing this you'd be subjected to a 25% charge (possibly 20% if you're quick enough), perhaps this has caused some confusion?