lisa rulings for relationships that fail

zutzut41

Hi, could anyone confirm a query for me , my son and his girlfriend bought a flat with a lifetime ISA . Unfortunately the relationship only lasted a year and my son was bought out from the property but lost money due to negative equity. He no longer is a first time buyer and is no longer a property owner , as his ex partner now owns the property - will he be able to save for a LISA again with a new partner or has he now used the LISA even though he no longer joint owns the property - thanks 

Alexland

If he is still under 40 he can still open and contribute to a LISA to earn bonuses (subject to the £4k contribution limit per tax year) however as he has previously owned property he will no longer be able to make a qualifying property purchase so any withdrawals before 60 would incur the early withdrawal penalty.

So it's really only an investing with bonuses for withdrawal age 60+ opportunity for him. Some of us do that anyway and can contribute and earn bonuses until age 50 after which the account just compounds until withdrawal. S&S LISA accounts are most suitable for these longer timescales.

His new partner may be able to use their LISA towards a joint purchase if they meet all the normal criteria.

zutzut41

Thanks very much for taking the time to comment , I still think its unfair, but rules is rules - Happy Christmas Alexland 

eskbanker

zutzut41 said:

I still think its unfair, but rules is rules

Those who are disadvantaged by consistent application of rules might consider them to be unfair, but objectively it really isn't - first time buyer status is a simple binary yes/no issue, so for such government incentives there's no concept of having a second go if the first doesn't work out, and your statement that "He no longer is a first time buyer" summarises exactly why he isn't entitled to use a LISA on a penalty-free basis (until he's 60).

AmityNeon

Technically it's first timer owner, because one can be ineligible without ever having bought a property at all.