How to Move a Lifetime ISA Between Providers Without Losing the Bonus

A Lifetime ISA (LISA) can be transferred from one LISA manager to another without triggering the 25% withdrawal charge and without losing the government bonus. This is known as a LISA-to-LISA transfer.

However, the rules around LISA transfers contain specific conditions that determine whether the bonus is preserved, whether a charge applies, and how the transfer interacts with contribution limits and first-home purchase timelines. This guide sets out those rules as defined in HMRC guidance and the Individual Savings Account Regulations 1998 (as amended).

Understanding the distinction between a LISA-to-LISA transfer and a transfer to a different ISA type is essential, as the financial consequences differ significantly.

Transferring a LISA to another LISA provider does not incur the 25% withdrawal charge and does not forfeit the government bonus. The transfer must be conducted between LISA managers — that is, the receiving account must also be a Lifetime ISA.

If the transfer is made to a non-LISA ISA type (such as a Cash ISA, Stocks and Shares ISA, or Innovative Finance ISA), it is treated as a chargeable withdrawal. The 25% withdrawal charge applies to the entire amount, and the bonus is lost. There are only two exemptions from this charge: reaching age 60, or having a terminal illness diagnosis where the individual is reasonably expected to live for less than 12 months. Even after age 60, LISA funds are withdrawn rather than transferred into another ISA wrapper — withdrawn funds lose ISA status unless re-subscribed using available ISA allowance.

The 12-month holding period required before using a LISA for a first home purchase is preserved when transferring between LISA providers. It is calculated from the date of first payment into the original LISA, not the date of the transfer.

LISA transfers are governed by the Individual Savings Account Regulations 1998 (SI 1998/1870), including Regulation 21 (ISA transfers), and Schedule 1 to the Savings (Government Contributions) Act 2017, which governs LISA bonus treatment.

The transfer process is initiated through the new (receiving) LISA provider, not the existing (transferring) provider. The investor contacts the new provider and completes a transfer form. In most cases, the new provider then forwards the transfer authority to the current provider. The current provider is then responsible for completing the transfer.

ISA managers are required under the ISA Regulations to permit transfers out, subject to the terms of the account. However, ISA managers are not required to accept transfers in. This means a provider may decline to receive a LISA transfer at its discretion. This is not a regulatory prohibition — it is a matter of individual provider policy.

During the transfer, the transferring manager must provide relevant account information to the receiving manager before the expiry of 30 days after the day of transfer, as required by Regulation 21(5A)(b). If the transferring manager has submitted a government bonus claim that has not yet been received from HMRC, the transferring manager must transfer that bonus to the new LISA manager when it is received. The receiving LISA manager can also claim any outstanding government bonus on transferred funds.

If the receiving account turns out not to be a LISA, the receiving ISA manager must notify the transferring manager. This notification allows the transferring manager to apply the 25% withdrawal charge, as the transfer would be treated as a chargeable withdrawal.

The following rules apply to LISA transfers, based on HMRC guidance and the ISA Regulations.

Transfer completion deadline

A LISA-to-LISA transfer must be completed within 30 days of receiving the investor's transfer request. This is a regulatory requirement set out in HMRC technical note 1.22. For comparison, Cash ISA transfers must be completed within 15 working days.

Current year payments must be transferred in full

Payments made in the current tax year (6 April to 5 April) cannot be partially transferred. If current year contributions are being moved, the entire current year amount must go to the new provider.

Previous years' payments can be partially transferred

Contributions from earlier tax years are not subject to the same restriction and may be partially transferred between LISA providers.

Annual contribution limit

The LISA contribution limit is £4,000 per tax year. A government bonus of 25% is paid on contributions, up to a maximum bonus of £1,000 per year. LISA contributions count towards the overall annual ISA contribution limit of £20,000 — the LISA limit is part of this total, not in addition to it.

One LISA per tax year

An investor can only pay into one LISA per tax year. This restriction means that a transfer is the only way to move between providers within the same tax year without affecting contribution eligibility.

Age limits

A LISA can only be opened by an individual aged 18 to 39. Once opened, contributions can continue until age 50, after which no further contributions or bonus payments are made, though the account remains open. After age 40, no new LISA can be opened. From age 60, funds can be withdrawn from a LISA without the 25% charge for any purpose. However, LISA funds cannot be transferred into another ISA type; withdrawn funds lose ISA status unless re-subscribed using available ISA allowance.

First home purchase rules

To use LISA funds for a first home purchase, the account must have been held for at least 12 months from the date of first payment. The property must be in the UK and valued at no more than £450,000. The investor must occupy the property as their sole residence immediately on completion.

25% withdrawal charge

The 25% charge applies to the entire amount when funds are withdrawn from a LISA before age 60, unless the investor has a terminal illness (where the individual is reasonably expected to live for less than 12 months). The investor must declare terminal illness status for this exemption to apply. From age 60, withdrawals are charge-free, but withdrawn funds lose ISA status and cannot be re-sheltered unless the investor has available ISA allowance.

"Transferring my LISA means I lose the bonus."

This is incorrect when the transfer is between LISA providers. A LISA-to-LISA transfer preserves the government bonus and does not trigger the withdrawal charge. The confusion often arises because a transfer to a different ISA type — such as a Cash ISA — does trigger the 25% charge and loss of the bonus.

"The 12-month clock resets when I transfer."

It does not. The 12-month holding period for first home purchase eligibility is calculated from the date of first payment into the original LISA, not the date of the transfer to a new provider. This has been confirmed in HMRC technical note 1.28 and by multiple provider sources.

"I can split my current year's LISA contributions across providers."

This is not permitted. Current year payments must be transferred in full. Additionally, an investor can only pay into one LISA per tax year, so splitting contributions between two active LISAs in the same year is not allowed. Previous years' contributions, however, can be partially transferred.

"Any LISA provider has to accept my transfer."

While ISA managers are required under the ISA Regulations to permit transfers out (subject to the terms of the account), they are not obliged to accept transfers in. A provider may decline to receive a LISA transfer based on its own policies.

"The 25% charge is just the bonus being clawed back."

The 25% withdrawal charge is applied to the entire withdrawal or transfer amount — including the investor's own contributions, the government bonus, and any growth. Because it is calculated on the total (which already includes the 25% bonus), the effective loss to the investor is more than just the bonus amount.

Multiple LISAs and the 12-month rule

If an investor holds more than one LISA, the 12-month holding period applies separately to each account. To use multiple LISAs for a first home purchase, each must have been held for 12 months from its own first payment date.

Cancellation within 30 days of opening

Under ISA cancellation rules, if a LISA is cancelled within 30 days of opening, no withdrawal charge applies and the subscription does not count towards the annual LISA limit. This may allow an investor to open another LISA in the same tax year if the cancellation occurs within this period. This is a cancellation right, distinct from the transfer rules.

Non-UK residents

In most cases, individuals who become non-UK residents cannot contribute to a LISA, but the account remains open. Existing funds and any government bonus already received are retained. Contributions may resume if UK residency is re-established.

Terminal illness exemption

An investor diagnosed with a terminal illness (where the individual is reasonably expected to live for less than 12 months) is exempt from the 25% withdrawal charge. The investor must declare their terminal illness status.

Outstanding bonus claims during transfer

If the transferring manager has submitted a bonus claim to HMRC that has not yet been paid at the time of transfer, the transferring manager must forward the bonus to the new LISA manager once received. The receiving manager can also claim any bonus that has not yet been claimed.

When an investor transfers a LISA to a new LISA provider, the practical effect is that the funds — including any government bonus — move to the new account without financial penalty. The 12-month holding period for first home purchase is preserved, running from the original first payment date. The new provider takes on responsibility for any outstanding bonus claims.

The transfer must be completed within 30 days. During this period, the investor's funds may be out of the market or unavailable, depending on the nature of the accounts involved and the providers' processes.

Because only one LISA can receive payments in any given tax year, and current year contributions must be transferred in full, the timing of a transfer within the tax year is relevant to how contributions are managed. Previous years' funds carry more flexibility, as they can be partially transferred.

If an investor initiates a transfer to what they believe is a LISA but the receiving account is a different ISA type, the receiving manager is required to notify the transferring manager, and the 25% withdrawal charge would apply.

The annual LISA contribution limit of £4,000 and the overall ISA limit of £20,000 are unaffected by the transfer itself — transfers do not consume allowance.

Does a LISA-to-LISA transfer trigger the 25% withdrawal charge?

No. Transferring between LISA providers does not incur the withdrawal charge and does not forfeit the government bonus. The charge applies when funds are withdrawn from a LISA before age 60 (unless the investor has a terminal illness), or when a transfer is made to a non-LISA ISA type, which is treated as a withdrawal.

Does my 12-month holding period for a first home purchase restart when I transfer?

No. The 12-month period is calculated from the date of first payment into the original LISA, not the date of transfer to the new provider.

How long does a LISA transfer take?

The transferring manager must complete a LISA-to-LISA transfer within 30 days of receiving the investor's transfer request. This is a regulatory requirement.

Can I transfer only part of my LISA?

Current year payments must be transferred in full and cannot be partially transferred. Previous years' payments can be partially transferred.

Can I pay into two LISAs in the same tax year?

No. An investor can only pay into one LISA per tax year. Transferring between providers is the mechanism for changing provider within a tax year without losing contribution eligibility.

What is the LISA contribution limit?

The annual limit is £4,000 per tax year. A 25% government bonus (up to £1,000) is paid on this amount. The £4,000 LISA limit is part of the £20,000 overall annual ISA allowance, not in addition to it.

Can a LISA provider refuse to accept my transfer?

Yes. ISA managers are required under the ISA Regulations to permit transfers out, subject to the terms of the account, but they are not obliged to accept transfers in. Individual providers may have their own policies on this.

What happens to my LISA if I move abroad?

In most cases, non-UK residents cannot contribute to a LISA, but the account remains open and retains existing funds and bonus. Contributions may resume if UK residency is re-established.

What happens to unclaimed bonus when I transfer?

The receiving LISA manager can claim any outstanding government bonus. If the transferring manager has already submitted a claim that HMRC has not yet paid, the transferring manager must forward the bonus to the new provider upon receipt.

At what age can I withdraw from a LISA without charge?

From age 60, funds can be withdrawn from a LISA without the 25% charge for any purpose. However, withdrawn funds lose ISA status and cannot be re-sheltered unless the investor has available ISA allowance.

What is the maximum property value for using a LISA towards a first home?

The property must be valued at no more than £450,000, must be located in the UK, and the investor must occupy it as their sole residence immediately on completion.

• A LISA can be transferred between LISA providers without losing the government bonus or incurring the 25% withdrawal charge.
• The 12-month holding period for first home purchase eligibility runs from the date of first payment into the original LISA and is preserved through transfers between providers.
• LISA-to-LISA transfers must be completed within 30 days. Current year payments must be transferred in full, while previous years' payments may be partially transferred.
• ISA managers are required to permit transfers out (subject to the terms of the account) but are not required to accept transfers in.
• The annual LISA contribution limit is £4,000 (within the £20,000 overall ISA limit), with a 25% government bonus of up to £1,000 per year.

Related: LISA Bonus Not Paid? | Help to Buy ISA vs LISA.