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You can find the current article at its original source at https://www.theguardian.com/money/2018/jul/24/lifetime-isa-legal-and-survey-fees-lose-bonus
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| Can I use my lifetime Isa to pay for legal and survey fees for my flat? | Can I use my lifetime Isa to pay for legal and survey fees for my flat? |
| (6 months later) | |
| Q I’m a first-time buyer in the process of buying a flat with a value of £130,000. I have £13,750 in a lifetime Isa, £3,000 of which is part of this tax year’s allowance (£750 being the government bonus). | Q I’m a first-time buyer in the process of buying a flat with a value of £130,000. I have £13,750 in a lifetime Isa, £3,000 of which is part of this tax year’s allowance (£750 being the government bonus). |
| I cannot find any information relating to what I can withdraw the funds for, beyond use as a deposit. My question is – can the amount in the Isa solely be used for the deposit payment, or can I also use it for legal and survey fees during the purchase without forgoing any of the bonus? | I cannot find any information relating to what I can withdraw the funds for, beyond use as a deposit. My question is – can the amount in the Isa solely be used for the deposit payment, or can I also use it for legal and survey fees during the purchase without forgoing any of the bonus? |
| If it’s the latter, it would be worth me transferring another £1,000 into the account to maximise the further £250 bonus available this tax year. If it’s the former I will use the entire amount towards the deposit to ensure no penalty. ES | If it’s the latter, it would be worth me transferring another £1,000 into the account to maximise the further £250 bonus available this tax year. If it’s the former I will use the entire amount towards the deposit to ensure no penalty. ES |
| A You could transfer another £1,000 into your lifetime Isa, as the maximum you can pay in each year is £4,000 if you are aged 18 to 39 (the lifetime Isa is not available to people outside that age range). As to whether it would be a good idea, it depends on whether you need the £1,000 for your legal and survey fees. | A You could transfer another £1,000 into your lifetime Isa, as the maximum you can pay in each year is £4,000 if you are aged 18 to 39 (the lifetime Isa is not available to people outside that age range). As to whether it would be a good idea, it depends on whether you need the £1,000 for your legal and survey fees. |
| The government’s technical guidance on what you can use withdrawals for without paying a 25% penalty is clear. If you are withdrawing funds as a first-time buyer to buy a home in the UK costing £450,000 or less and with a mortgage, any money from a lifetime Isa withdrawn before the age of 60 can only be used to cover the purchase price of a property. This is defined as the “value required to be paid under the sale and purchase agreement” and does not include extras such as legal and survey fees, or indeed any amount paid for fixtures and fittings not included in the sale price. | The government’s technical guidance on what you can use withdrawals for without paying a 25% penalty is clear. If you are withdrawing funds as a first-time buyer to buy a home in the UK costing £450,000 or less and with a mortgage, any money from a lifetime Isa withdrawn before the age of 60 can only be used to cover the purchase price of a property. This is defined as the “value required to be paid under the sale and purchase agreement” and does not include extras such as legal and survey fees, or indeed any amount paid for fixtures and fittings not included in the sale price. |
| So you are right, to avoid a penalty on your withdrawal – which your lifetime Isa manager is required to pay directly to your conveyancer or solicitor rather than to you – all of it must be used for the deposit. | So you are right, to avoid a penalty on your withdrawal – which your lifetime Isa manager is required to pay directly to your conveyancer or solicitor rather than to you – all of it must be used for the deposit. |
| You wouldn’t have been able to use any lifetime Isa money to pay stamp duty either. However, the good news is that as your flat is costing less than £300,000 you are let off paying this tax. | You wouldn’t have been able to use any lifetime Isa money to pay stamp duty either. However, the good news is that as your flat is costing less than £300,000 you are let off paying this tax. |
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| Ask the experts: homebuying | Ask the experts: homebuying |
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