We love the Lifetime ISA!

  • by Carole Jordan
  • 10 Apr, 2017

Young people in the UK rejoice! From 6th April a new tax free savings account will be available for UK residents aged between 18 and 40 years.  The Uk government will also contribute to the fund which must be used either for the first time property purchase or for retirement.

What could the Lifetime ISA mean for you?

The Lifetime ISA allows you to save up to £4,000 per year, which can be in cash and stocks and shares, in whatever proportion suits you. 

The UK government will contribute an additional 25% each year until you use the funds to buy your first property. You must use a solicitor for this and the funds are paid direct to them for the property purchase. You must also use mortgage lending to purchase the property. 

If your aim is to save for retirement, the funds become available with the government bonus added, when you are 60 years of age. 

So for those in the right age bracket this looks like a great deal!

Can you have a help to buy ISA & a Lifetime ISA?

If you already have a ‘help to buy ISA’ you can transfer the whole balance before 5th April 2018 if you wish, or run both alongside each other. From 6th April you’ll be able to only transfer £4,000 of your Help to Buy Isa each year, which will use up your allowance. 

There is now a variety of ways to save tax effectively and also to boost your returns with interest rates so low. The total ISA savings limit for 2017/18 is £20,000 and this can be deposited in a combination of the original cash or shares ISAs, the existing Help to Buy ISA and now the new LISA. 

Remember to also consider normal savings and investment options as returns may be higher and interest has been tax free to a limit of £5,000 from 6th April 2016.

 So now is the time to take a good look at your savings, look for the best savings rates, be sure you’re making the most of the schemes available, getting any bonuses you qualify for and keeping your tax liability down. 

For more information check out the HMRC Lifetime ISA pages .


All details above were correct at the time of publishing - for more up to date information please   get in touch .

You might also be interested in...

Why not leave us a comment, or share with a friend...

Want free advice for your small business?
Sign up to our blog

Browse our other Small Business posts

Our latest blog

by Carole Jordan 11 Aug, 2017

HMRC have released their new advisory fuel rates for drivers of company vehicles. These came into effect from 1st July and allow reimbursement of fuel tax free at these levels.

by Carole Jordan 04 Aug, 2017

Nobody wants to pay tax on divorce. So how do you keep your tax bill down while coming to a sensible arrangement with your spouse?

by Carole Jordan 28 Jul, 2017

Since the change to Dividend tax came in you may be wondering if there are more tax efficient ways of drawing funds from your company.  Read more for an idea that can save tax each year.

by Carole Jordan 18 Jul, 2017

I love the summer for sitting back and reflecting on the year. Thinking back to the dark days of winter and forward to the joy of Christmas time. Now is the ideal time to review how your business is going and as you revive yourself through holidays and sunshine you’ll be well placed to make any changes come the autumn.

by Carole Jordan 17 Jul, 2017
Landlords will be expected to use Cash Basis Accounting from 2017/18.  
So what does that mean for your rental property accounts and tax?
More posts

Which Small Business support are you looking for?

Share by: