Overview

This bill outlines government contributions to Lifetime ISAs and Help-to-Save accounts. It details how these contributions are made, their tax treatment, and the rules surrounding withdrawals, penalties for non-compliance, and information sharing.

Description

The bill sets out rules for government bonuses paid into Lifetime ISAs and Help-to-Save accounts. Lifetime ISAs will receive bonuses based on qualifying additions, as defined by Treasury regulations. These regulations will also determine the amount of the bonus. Withdrawals from Lifetime ISAs before certain ages or for non-specified reasons will incur charges ( a percentage of the withdrawal as specified in Treasury Regulations) paid to HMRC. HMRC will administer these bonuses and charges. The bill also specifies penalties for providing inaccurate information in relation to claims. For Help-to-Save accounts, the government bonus amount and payment schedule are specified by Treasury regulations. Eligibility for both schemes is determined by meeting certain benefit criteria and residing in the UK. Both schemes define account features and account providers. The bill includes provisions for information sharing between HMRC and other relevant parties for the administration and enforcement of this legislation and defines what constitutes penalties for non-compliance and dishonesty in relation to both schemes.

Government Spending

The bill will lead to increased government spending on the government contribution to Lifetime ISAs and Help-to-Save accounts. Exact figures are not provided in the bill itself, but the amount will depend on the number of people participating in each scheme and the size of their contributions.

Groups Affected

• Individuals using Lifetime ISAs: They will receive government bonuses, but may face charges on early withdrawals.
• Individuals using Help-to-Save accounts: They will receive government bonuses subject to eligibility criteria.
• HMRC: Responsible for administering bonuses, collecting charges, and enforcing regulations. Increased workload and administrative costs are expected.
• Account providers (Lifetime ISAs and Help-to-Save accounts): Will have responsibilities for managing accounts and complying with reporting requirements.
• Treasury: Responsible for setting regulations and approving account providers.

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