Making Lifetime ISA withdrawal charges and charge-free withdrawals

Imported from official source

March 12, 2020 13:35

Investors can access their Lifetime ISA funds at any time subject to the accounts terms and conditions set by their ISA manager.

It is your responsibility as a Lifetime ISA manager to calculate and deduct the correct withdrawal charge from funds withdrawn from a Lifetime ISA. You can ask HMRC for advice about withdrawal charges when funds are withdrawn from an account.

An investor should be able to withdraw their Lifetime ISA savings and investments within 30 days of an instruction to their ISA manager. These rules do not apply to withdrawals for a first time residential purchase.

When you can make a charge-free withdrawal

Withdrawals that are not subject to a withdrawal charge include:

first time residential purchases where the property costs £450,000 or less

when an investor has reached the age of 60 — any subsequent growth or interest earned by their Lifetime ISA will continue to be tax free

payments removed from an invalid account

management fees charged by, and paid directly to an ISA manager in line with its terms and conditions

when a Lifetime ISA manager is declared in default by either the Financial Conduct Authority (FCA) or the Financial Services Compensation Scheme (FSCS)

an act, omission or circumstance not caused by an investor

recoupment and repayment of an incorrect government bonus to HMRC

When you need to make a withdrawal charge

Withdrawals made on or after 29 October 2026 for properties that costs more than £450,000 are subject to a 20% withdrawal charge. Find out about withdrawals for a first time residential purchase.

Any other amount withdrawn from a Lifetime ISA that is not the result of a life event is subject to a 25% withdrawal charge. You should deduct this from the funds withdrawn by the investor.

This is an extract. The publication continues at the source.

Contains public sector information licensed under the Open Government Licence v3.0. Licence

Read the original at the source: https://www.gov.uk/guidance/lifetime-isa-withdrawal-charges-and-charge-free-withdrawals

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Organization: HM Revenue and Customs — imported from official source
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Imported: October 28, 2026 18:01
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Identity: https://www.gov.uk/guidance/lifetime-isa-withdrawal-charges-and-charge-free-withdrawals...