Can my daughter's partner use her Lifetime ISA allowance?
10 March 2021
Question by Karen
My daughter has a lifetime ISA and is looking to set up home with her partner, he is paying for the mortgage as she is a student and can’t go on the mortgage as it decreases the amount that he can borrow. Can she still use her lifetime ISA to put towards the deposit?
Answered by Boring Money
This is a really interesting question. You can use your LISA savings to help you buy your first home if all the following apply:
the property costs £450,000 or less
you buy the property at least 12 months after you make your first payment into the Lifetime ISA
you use a conveyancer or solicitor to act for you in the purchase
you’re buying with a mortgage
As your daughter is not part of the mortgage, I assume she will not be on the deeds of the property. She therefore wouldn’t qualify under these rules and wouldn’t be able to use her lifetime ISA and the bonus towards the purchase.
However, LISA holders who withdraw money will essentially face no penalty for doing so until April 2021. Previously, you were charged 25% of the amount withdrawn unless you were over 60 or buying your first home. That's been cut to 20% until April 2021, which in effect is equivalent to the bonus being taken back.
If your daughter is planning on contributing towards the deposit and mortgage costs but has no legal charge over the property, you may want to consider taking some legal advice on protecting her contribution if the relationship later breaks down.