LISA issues

kbells

Hi there,

I'm hoping for some advice or to hear others experiences.

I recently opened a LISA with Skipton at the eleventh hour (day before my 40th). I was initially intending to use Moneybox but they informed me they would be unable to do so by my birthday deadline. 

All was fine with applying via Skipton I made a £1 transfer from my Nationwide account and it showed on my balance that day in the New Skipton LISA so no reason to see a problem. 

Since then Skipton contacted me to inform me my account couldn't be registered with HMRC as I was 40. Of course I replied explaining I opened it and made the first payment at 39. 

Now they are telling me the payment did not clear until the next day (my 40th) with faster payments I'm sceptical even though this was made on a weekday evening. But even so there was no advisory regarding this when signing up. If there had of been I'd have used another provider/debit card payment. 

Any advice on where I can go from here if anywhere? 

Thanks all! 

masonic

Do you have any evidence the opening deposit was credited to your account on the day you sent it? Debit card should be treated as having been received the moment the transaction was authorised, whereas a Faster Payment can be delayed by up to the end of the next working day. First payment to a new payee is more likely to be subject to a temporary hold than a regular payment.

Here is the blurb on their website:

I'm not sure it makes sense that they are saving it "will be applied in 2 hours of the payment being sent, regardless of the day or time it has arrived". The sending bank might not release it within 2 hours of you sending it. That said, there's enough there to suggest an evening payment would be risky if it must be received on the same day.

kbells

Frustratingly, this seems to be a rare occasion when I didn't take a screenshot as the payment was showing I didn't foresee any such issues.

I agree the statement on their website makes little sense...

It seems to explain both why the funds were applied to my account one day and yet not received till the next.

Talk about misleading! As is the information that you can open a LISA up until your 40th birthday when it seems it's actually 2 business days before your 40th birthday!! 

masonic

HMRC defines "open" in this context as funding an ISA:

https://www.gov.uk/guidance/how-to-open-an-isa-as-an-isa-manager#when-you-can-open-an-individual-savings-account-isa

Here are the rules providers must abide by when deciding when a subscription is made:

Which includes:

But...

https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors#cash-subscriptions

kbells said:

Talk about misleading! As is the information that you can open a LISA up until your 40th birthday when it seems it's actually 2 business days before your 40th birthday!! 

The misleading part is that Skipton seems to have stated "sent" when they meant "received" in the first sentence. However, it is not correct that you would have needed to send the payment 2 business days before your birthday (although that would have been sensible). You could have made the payment by debit card and authorised it at 11:59 pm on the day before your birthday and all would have been well.

Really this is not a lot different than subscribing to an ISA just before the end of the tax year. Many miss the boat, and the advice is always don't leave it until the last minute in case of delay.