Lifetime ISA bonus and tax credits interest declaration query

[flumaflower]

I have a lifetime ISA (LISA) and because of the 25% bonus towards first home it's a fairly significant bonus of interest on the funds held in there. I am not sure if this interest counts as declarable for tax credits renewal purposes.

Can anyone help with this? I called Tax Credits and the lady on the phone first looked up ISAs and said they don't update their systems with this information. I queried this to double check, and she checked with her supervisor and said then that they deduct the £300 from it but count additional interest as "other income".

I find this a bit confusing as I was led to believe that the bonuses on LISAs were tax free and as such non-declarable to tax credits in terms of their taxable interest declaration.

The lady didn't seem 100% sure herself. So any one else know? I want to get it right.

Many thanks

I'm not 100% sure but when I had tax credits, any interest over £300 had to be declared as additional income. I looked into a LISA rather than a pension, but it would have affected my benefits as counted as savings so I didn't bother.

My guess is that it would count.

Anything in an ISA is not taxable interest. You don't need to declare.

Unless rules have changed in the last few years, tax free interest doesn’t count when claiming tax credits. It would for UC or HB