Lifetime ISAs guide
Comments
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You should get the 25% bonus on anything added to the LISA, so if it's accepted into the account then you should get the bonus on it.dfbefore30 wrote: »I'm a bit confused about my Lifetime Isa.
In June, I opened a LISA with Skipton. I then transferred in my help to buy Isa and about 2500 from a previous Isa. I assumed the money from my second isa would count towards my 4000 for the bonus.
I recently rang Skipton to check how much more I could put in before the end of the tax year (I thought I'd maxed it out but just wanted to check). I was told I could put in another 2500 and that the money from my previous isa didn't count. I've now topped it up with an additional 2500.
Can anyone confirm whether the bonus will be paid for the 4000 only, plus my previous htb balance, or whether I will also get a bonus for the previous isa balance?
However, that £2500 clearly shouldn't have been accepted into the LISA under the scheme rules so at some point (maybe when Skipton do the year-end reporting to HMRC) it's likely to be reversed out, and if/when that happens I'd have thought you'd have every right to complain to Skipton that you acted in good faith on information they provided and what are they prepared to do about it....0 -
As Brother and Sister can they put into two LISA's and use this in the future to buy a 1st home together (50/50 mortgage)
Many Thanks0 -
With regards to the penalty for early withdrawal: as long as the investments in the LISA grow at more than 6.25% after fees, there's no actual loss of initial capital is there?0
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Yes, as long as they each meet the various scheme criteria, e.g. aged under 40 when opening the LISAs, buying more than a year later, property no more than £450K, etc....As Brother and Sister can they put into two LISA's and use this in the future to buy a 1st home together (50/50 mortgage)0 -
I have LISA (opened in April 2017) which I would like to use towards a deposit for my first house purchase.
1). Who begins the process of using the funds in my LISA towards a mortgage deposit? I spoke with my solicitor and she has said it is not her place to use ISA monies.
2). Can the monies in the LISA actually be used as a mortgage deposit? It has been suggested that the monies in the LISA will only be received on completion of the purchase (i.e. only once I have put down the deposit) and then the monies will be "re-funded" at a later date.
Thanks for assistance in advance0 -
With regards to the penalty for early withdrawal: as long as the investments in the LISA grow at more than 6.25% after fees, there's no actual loss of initial capital is there?
Yes if your stocks & shares LISA grows sufficiently this could offset the penalty for early withdrawal. It's still a penalty as you would have done better with the same investments a S&S ISA.0 -
1). Who begins the process of using the funds in my LISA towards a mortgage deposit? I spoke with my solicitor and she has said it is not her place to use ISA monies.
The registered solicitor would need to request withdrawal of the money from the LISA provider. If your solicitor doesn't understand this it suggests they might not be registered to use LISAs. Still nobody would do this yet as the accounts are not 12 months old yet and the first bonus hasn't paid.2). Can the monies in the LISA actually be used as a mortgage deposit? It has been suggested that the monies in the LISA will only be received on completion of the purchase (i.e. only once I have put down the deposit) and then the monies will be "re-funded" at a later date.
Yes the LISA can be used as a mortgage deposit. The solicitor would draw the funds when required.
Alex.0 -
Thanks for that info. I'm going to Australia on a Working Holiday visa. It looks like the definition of a "UK resident" (and can therefore pay into an ISA) is someone who spends 6 out of 12 months in the UK. So potentially I wouldn't stop being a UK resident until I hit the 6 month mark? Because I could be there for less than 6 months (I don't know how long I'll be there yet) and therefore always remain a UK resident. But either way, as long as I don't pay in to the LISA after the 6 month mark, only before that or after returning, it should be all good?I suggest you read the below important information if you are moving abroad temporarily. Also be aware the other country may not recognise your ISA as free from their tax rules...
https://www.gov.uk/individual-savings-accounts/if-you-move-abroad-or-die0 -
Thanks for that info. I'm going to Australia on a Working Holiday visa. It looks like the definition of a "UK resident" (and can therefore pay into an ISA) is someone who spends 6 out of 12 months in the UK. So potentially I wouldn't stop being a UK resident until I hit the 6 month mark? Because I could be there for less than 6 months (I don't know how long I'll be there yet) and therefore always remain a UK resident. But either way, as long as I don't pay in to the LISA after the 6 month mark, only before that or after returning, it should be all good?
It depends how your time away falls across tax years.
https://www.gov.uk/tax-foreign-income/residence
Whether you’re UK resident usually depends on how many days you spend in the UK in the tax year (6 April to 5 April the following year). You’re automatically resident if either:- you spent 183 or more days in the UK in the tax year
- your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year
- you spent fewer than 16 days in the UK (or 46 days if you haven’t been classed as UK resident for the 3 previous tax years)
- you work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working
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Just got the following from Skipton:Your government bonus payment
Weve been informed by HMRC that your 2017/18 Lifetime ISA bonus will be paid by 4 May 2018. Youll start earning interest on it from the date it arrives. We will email you when the bonus has been added to your account so theres no need to keep checking.
Will be interesting to see the payment dates for the bonus in future months. E.g. will they wait for the funds from HMRC, or will they just credit before they get the funds. I assume the former, especially if interest rates rise!0
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