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    • SunnyCat
    • By SunnyCat 12th Sep 19, 3:52 PM
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    SunnyCat
    House purchase fell through- what about LISA?
    • #1
    • 12th Sep 19, 3:52 PM
    House purchase fell through- what about LISA? 12th Sep 19 at 3:52 PM
    Our purchase fell through just before the exchange and our solicitor had already withdrawn our LISAs. What happens now, is it possible to put the money back into the accounts? Would they have been closed?
Page 1
    • eskbanker
    • By eskbanker 12th Sep 19, 4:46 PM
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    eskbanker
    • #2
    • 12th Sep 19, 4:46 PM
    • #2
    • 12th Sep 19, 4:46 PM
    The solicitor should return the money to the LISAs, following the guidance at the 'Failed first time residential purchase' section of https://www.gov.uk/guidance/lifetime-isas-for-isa-managers#withdrawals-for-first-time-residential-purchase
    • SunnyCat
    • By SunnyCat 12th Sep 19, 7:49 PM
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    • #3
    • 12th Sep 19, 7:49 PM
    • #3
    • 12th Sep 19, 7:49 PM
    Thank you for a clear response! That's good to hear. And just to double-check, when the funds are put back into the LISA account, even if the account had been closed, they can be withdrawn again for an eligible house purchase without the requirement to have sat in the account for 12 months since being paid back in?
    • eskbanker
    • By eskbanker 12th Sep 19, 10:56 PM
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    eskbanker
    • #4
    • 12th Sep 19, 10:56 PM
    • #4
    • 12th Sep 19, 10:56 PM
    And just to double-check, when the funds are put back into the LISA account, even if the account had been closed, they can be withdrawn again for an eligible house purchase without the requirement to have sat in the account for 12 months since being paid back in?
    Originally posted by SunnyCat
    It does seem reasonably well defined (in that gov.uk ISA guidance) that penalty-free withdrawals for first properties can only be made if "it’s at least 12 months since the first payment was made by the investor into the LISA from which the withdrawal is made", so on the face of it, closing the account and reopening a new one would effectively reset that clock and you'd have to wait another 12 months, assuming that reopening the original one wasn't viable.

    I hope that this is all hypothetical based on your earlier question about closure, i.e. that the accounts haven't actually been closed - it shouldn't be possible for them to have been closed without your knowledge and consent, as a separate action from making the withdrawals....
    • SunnyCat
    • By SunnyCat 13th Sep 19, 8:09 AM
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    • #5
    • 13th Sep 19, 8:09 AM
    • #5
    • 13th Sep 19, 8:09 AM
    it shouldn't be possible for them to have been closed without your knowledge and consent, as a separate action from making the withdrawals....
    Originally posted by eskbanker
    Ok, I wasn't sure whether the full withdrawal closed the account - hopefully this means that's not the case. I dug out the email Skipton sent me confirming the withdrawal, which says this:

    Following your recent request to withdraw £xxxx from your Lifetime ISA for your first house purchase, we confirm the funds have been sent to xxxx as requested.

    In accordance with the Lifetime ISA regulations your conveyancer will let us know the completion date within 10 working days of the house purchase being completed.
    (...)

    Things to consider

    If this was the only account you held with Skipton, closing your account will mean that your membership of Skipton has ended.

    If this withdrawal has closed your account, please note that you cannot pay into another Lifetime ISA in the same tax year where you have made payments into the account that has been closed


    It doesn't say in that email or in another that the account has been closed.
    • SunnyCat
    • By SunnyCat 13th Sep 19, 8:15 AM
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    SunnyCat
    • #6
    • 13th Sep 19, 8:15 AM
    • #6
    • 13th Sep 19, 8:15 AM
    I actually just logged into the account to check. It says it's closed (But still listed, just as "closed"). Hopefully the original account will be reopened with the return of funds.
    • eskbanker
    • By eskbanker 13th Sep 19, 9:38 AM
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    • #7
    • 13th Sep 19, 9:38 AM
    • #7
    • 13th Sep 19, 9:38 AM
    Skipton's LISA FAQ states:
    What if the house purchase falls through?

    The conveyancer must return the funds within 10 working days of the house purchase falling through, and the amount withdrawn will be paid back in to your account. If the first house purchase withdrawal had closed the account, it will be reopened when the funds are returned, but your membership will not be backdated (if this was the only Skipton account you held). If the conveyancer returns less than the amount withdrawn for the first house purchase, or doesn’t return the funds, you will be charged a 25% government withdrawal charge on the shortfall amount.
    which sounds like good news, assuming their reference to not backdating membership doesn't mean restarting the LISA clock.

    How far are you into the ten working days period within which your solicitor must return the funds?
    • SunnyCat
    • By SunnyCat 13th Sep 19, 4:48 PM
    • 130 Posts
    • 65 Thanks
    SunnyCat
    • #8
    • 13th Sep 19, 4:48 PM
    • #8
    • 13th Sep 19, 4:48 PM
    How far are you into the ten working days period within which your solicitor must return the funds?
    Originally posted by eskbanker
    I am hoping your interpretation is right! We found out from the EA that the seller was withdrawing on Wednesday, which makes today day 3? The solicitor is sending the money back on Monday. I'm not sure what the specific trigger is, but I think we're safely inside the period.
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