What happens to a Lifetime ISA when someone dies?
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In short: A LISA forms part of your estate for inheritance tax — unlike most pension pots. Beneficiaries receive the value (including bonuses) subject to the estate's tax position. ISA tax advantages end on death.
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Reviewed by Kaiser Khan
Spouses may receive additional ISA subscription allowances to reinvest inherited ISA value in some circumstances — check current HMRC rules with your executor.
The 25% withdrawal penalty does not apply on death; the provider pays the estate or beneficiaries per the will or intestacy rules.
If you hold a joint life policy or dependants rely on the LISA, consider whether pension or life insurance wrappers suit better for estate planning.
See LISA withdrawal rules and wills guide for coordination with executors.
Primary source: gov.uk/lifetime-isa
Part of our Savings & ISAs
This quick answer sits inside our wider savings & isas hub — with sub-guides, calculators and step-by-step explainers on the same topic.
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