House purchase - who handles withdrawal from LISA. Totally confused!

October22Mover

Hey all, have just exchanged contracts on a flat, finally.

Throughout the process we've sent info to our conveyancer about my partner's LISA provider's requirements for making a withdrawal and she's just said yes yes, we'll do that when we exchange.

Now we've exchanged, I've asked what they need from us to sort out the LISA withdrawal and the conveyancer has responded with total bafflement, and said "you will need to close the account, I am not aware we have any involvement in that???"

This is completely counter to my understanding of the process of using a LISA towards a house purchase. I thought if we closed it ourselves we'd be subject to a penalty and the conveyancer has to request the money. Am I missing something here?

Mark_d

What did you  bank say they process should be?

Lorian

You don't close it, you arrange for it to be paid to your solicitor. For example see moneybox help page 

https://www.moneyboxapp.com/faqs/lisa/how-can-i-use-my-lifetime-isa-to-buy-house/

Chief_of_Staffy

I've only got a regular ISA but isn't it just the case you transfer the full balance to your solicitor (as mentioned) like you would with a regular savings account? So you get the solicitor's account details, arrange the transfer with your LISA provider, and hey presto. I think you need to withdraw the lot or you have to pay a penalty, so it will result in the LISA being closed when the transfer is made.

Still, good to see your solicitor explained it so well for you. Well worth the money you're paying them. Don't get me started.

Tiglet2

You need to read the rules from your LISA provider to understand what they require you to do.  

The links below are examples of the general procedure, which may help you understand what you have to do and what your solicitor has to do.    It is important to get the timings right.

It would seem that you need to start the process by informing your solicitor/provider that you are purchasing a property.  Providing you meet the stated requirements, you will probably need to fill in a form with your solicitor's details so that the funds from the LISA can be sent directly to the solicitor for your exchange deposit.  The solicitor applies for the bonus, but it is important that you follow the correct procedure.  See examples below:

https://www.foresters.com/en-gb/savings/ISA/Lifetime-isa/Lifetime-isa-house-purchase

https://www.skipton.co.uk/savings/isas/lifetime-isa/using-a-lifetime-isa

Myci85

With my LISA (Paragon) I had to download some forms and fill in the first one, then send them to my solicitor for them to request withdrawal. At the same time I could choose to close the account, or leave it open so I could use it to continue saving for retirement. 

I think the official line was it could take up to 30 days for the money to be transferred to my solicitor once requested, so I was panicking when we went from seeming to be ages away from being ready, to suddenly talking about dates for exchange, but it only took a few days in the end. 

October22Mover

Chief_of_Staffy said:

I've only got a regular ISA but isn't it just the case you transfer the full balance to your solicitor (as mentioned) like you would with a regular savings account? So you get the solicitor's account details, arrange the transfer with your LISA provider, and hey presto. I think you need to withdraw the lot or you have to pay a penalty, so it will result in the LISA being closed when the transfer is made.

Still, good to see your solicitor explained it so well for you. Well worth the money you're paying them. Don't get me started.

From as far as I can tell on the HMRC website, it's always the conveyancer that needs to request the money. You tell them to do it and let them know who they need to send the conveyancer declaration to, which there's also a template for on the HMRC website. My partner actually sent our conveyancer all of this info during a previous purchase process that fell through, including the address to send the declaration to, so even more bizarre that she's acting confused now.

https://www.gov.uk/guidance/lifetime-isa-withdrawals-for-a-first-time-residential-purchase

Quite basic stuff as far as I can tell!

Chief_of_Staffy

October22Mover said:

Chief_of_Staffy said:

I've only got a regular ISA but isn't it just the case you transfer the full balance to your solicitor (as mentioned) like you would with a regular savings account? So you get the solicitor's account details, arrange the transfer with your LISA provider, and hey presto. I think you need to withdraw the lot or you have to pay a penalty, so it will result in the LISA being closed when the transfer is made.

Still, good to see your solicitor explained it so well for you. Well worth the money you're paying them. Don't get me started.

From as far as I can tell on the HMRC website, it's always the conveyancer that needs to request the money. You tell them to do it and let them know who they need to send the conveyancer declaration to, which there's also a template for on the HMRC website. My partner actually sent our conveyancer all of this info during a previous purchase process that fell through, including the address to send the declaration to, so even more bizarre that she's acting confused now.

https://www.gov.uk/guidance/lifetime-isa-withdrawals-for-a-first-time-residential-purchase

Quite basic stuff as far as I can tell!

Right, I see. Seems to be something a conveyancer should know and deal with all the time. If it's your actual conveyancer who sent that instead of their assistant, maybe think about getting a new one.

youth_leader

My solicitor had a less than efficient partner many moons ago, it almost ruined him, there are incompetents out there. 

I would phone your solicitor urgently, as you have just exchanged, when is your completion date?

 

Chief_of_Staffy

youth_leader said:

My solicitor had a less than efficient partner many moons ago, it almost ruined him, there are incompetents out there. 
 

I was emailed by my solicitor's assistant three days ago asking if I was OK to exchange immediately and complete in ten days. When I ventured that was a bizarre thing to say, given the searches are not due for a month and numerous other queries are outstanding, she said, and I quote, "Oh yeah, I forgot you were making a purchase as well as selling." Jesus wept.

youth_leader

So sorry @Chief_of_Staffy.  It is an extremely stressful time and you need to have confidence in the professionals working for you.