Following the proposal to reduce the lifetime ISA (LISA) withdrawal
charge from 25% to 20%, HMRC’s updated guidance confirms that LISA managers can
apply the 20% withdrawal charge immediately, if their systems allow it. HMRC
will aim to update its digital LISA service in June 2020 but, in the meantime,
managers can either deduct the 20% charge when investors make an unauthorised withdrawal
and report the charge when the digital service becomes available, or deduct and
report a 25% charge and make a “superseded withdrawal charge” report later on
using the digital service.
Following the proposal to reduce the lifetime ISA (LISA) withdrawal
charge from 25% to 20%, HMRC’s updated guidance confirms that LISA managers can
apply the 20% withdrawal charge immediately, if their systems allow it. HMRC
will aim to update its digital LISA service in June 2020 but, in the meantime,
managers can either deduct the 20% charge when investors make an unauthorised withdrawal
and report the charge when the digital service becomes available, or deduct and
report a 25% charge and make a “superseded withdrawal charge” report later on
using the digital service.
