Taking out a Lifetime ISA after already having and using Help to Buy ISA ?

BigBlueSky

I was discussing Lifetime ISA's with a friend who has used a Help to Buy ISA to buy his first property a few years back.

Is it possible to know take out a Lifetime ISA for the purpose of retirement, or is the government bonus no longer available even if only a small amount was claimed in his previous Help to Buy ISA ?

Thanks in advance

eskbanker

LISA is a completely independent scheme, and there's nothing preventing someone from opening and using one if they've already benefitted from HTB, if they (a) are still under 40 and (b) accept that they won't be able to access its contents without penalty under 60.

BigBlueSky

Thanks for the confirmation.  I wasn't sure, I couldn't find anything official.  All I found was:

"If you have a Help to Buy ISA as well as a Lifetime ISA , you can only use the government bonus from one of them to buy your first home. You can transfer money from a Help to Buy ISA to a Lifetime ISA ."

Which is different as the government bonus from the Lifetime ISA will be for retirement, not for purchasing the first home.

eskbanker

It's one of those 'proving a negative' situations - you'll struggle to find anything that expressly confirms that there isn't a restriction, but conversely you won't find anything that states that there is!

If there was any issue (other than not being able to use the bonus from both schemes towards a first property purchase) then it would be spelt out in documents such as https://www.gov.uk/guidance/managing-lifetime-isa-applications-and-accounts

alibean121

There's nothing in the rules that forbids this. I used a LISA to buy my first property then opened a new S&S LISA so I had the option to use it to save for retirement. It doesn't particularly make sense for me to save into it with my tax situation but you never know how the future with unfold and I thought it best to have one available if the scheme was withdrawn in future.

Kaizen917

Im a bit on the crossroads with my LISA because I dont think I would be able to use it to buy something in London with that limit on property price. So currently I see it as another SIPP but given that it uses up my yearly ISA allowance, Im quite reluctant to deposit in it.

eskbanker

Kaizen917 said:

Im a bit on the crossroads with my LISA because I dont think I would be able to use it to buy something in London with that limit on property price. So currently I see it as another SIPP but given that it uses up 20% of my yearly ISA allowance, Im quite reluctant to deposit in it.

Clarifying wording added in bold!