Lifetime ISA - qualifiying period for bonus

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g4efe
g4efe Posts: 23 Forumite
in Savings & investments
Hi folks - I've just opened a cash LISA in my daughter's name and put in £1 (!) to kick it off. She's looking for a suitable property and may find one in the next 12 months. At what point do I have to put 4K in qualify for the £1K bonus. I don't want to deposit all the money now as I'll have to pay the 5 per cent penalty, if withdrawn within 12 months. At the same time, we don't want to miss out on the bonus. I cab't seem to find the definitive answer. Even the Skipton BS answer wasn't cut and dry. Thanks.

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  • nb0825
    nb0825 Posts: 115 Forumite
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    the bonus is paid at the end of the taxable year April 5th.
  • g4efe
    g4efe Posts: 23 Forumite
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    nb0825 wrote: »
    the bonus is paid at the end of the taxable year April 5th.

    Thanks for the info. What I also need to know is how long I need to have the money in the account before she qualifies for the bonus: 1 day, a month, six months? Thanks
  • Ed-1
    Ed-1 Posts: 3,892 Forumite
    First Anniversary Name Dropper First Post
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    g4efe wrote: »
    Hi folks - I've just opened a cash LISA in my daughter's name and put in £1 (!) to kick it off. She's looking for a suitable property and may find one in the next 12 months. At what point do I have to put 4K in qualify for the £1K bonus. I don't want to deposit all the money now as I'll have to pay the 5 per cent penalty, if withdrawn within 12 months. At the same time, we don't want to miss out on the bonus. I cab't seem to find the definitive answer. Even the Skipton BS answer wasn't cut and dry. Thanks.

    There is no 5% penalty this year. You can withdraw before 6th April 2018 without charge but the LISA must be closed. This is because the first bonuses aren't being paid until the end of this tax year. They will be paid each month from next year.

    There's a 25% one from 6th April 2018 onwards though.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Name Dropper First Post First Anniversary Post of the Month
    edited 13 July 2017 at 4:46PM
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    g4efe wrote: »
    Thanks for the info. What I also need to know is how long I need to have the money in the account before she qualifies for the bonus: 1 day, a month, six months? Thanks



    A day is fine.
    The first bonus (on everything you contribute or transfer in up to and including 5/4/2018) will be paid in by HMRC in April/May next year after your ISA manager reviews what's been paid in over the course of this first tax year and applies for the bonus.

    After that, bonuses will be paid in based on what you contribute from month to month, more like real time but with some rolling delay.

    So, if you were cutting it fine you could open the account and make the first contribution on 5 Apr 18 and still qualify to get the bonus on the contribution.

    But importantly, once your money is no longer just "your money" but "your money plus a bonus that's been applied for or received", you can't take your money out without penalty for a qualifying house purchase until the account has been open for at least 12 months.

    The 12 months would start from whenever you open the LISA (or whenever you opened an earlier LISA that you transferred into the current one)
  • g4efe
    g4efe Posts: 23 Forumite
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    That's perfect! Thanks a lot. So I'll keep it at £1 and then top it up with another £3999 in March, sometime (don't want to cut it too fine!), then hope she doesn't find a house until at least the 12th of July! Thanks again.
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