Skip to content

ACCA Applied Skills · Taxation (UK) · The overall function and purpose of taxation in a modern economy

Elena, a UK resident, has £7,000 in a cash ISA and wants to subscribe the maximum permitted in the tax year to a stocks and shares ISA, having made no other subscriptions this year. Using the TX-UK Finance Act 2025 figures, what is the overall ISA investment limit and the maximum further amount she can subscribe, assuming the £7,000 counts as this year's subscription?

The overall ISA limit is £20,000, so after subscribing £7,000 Elena can add £13,000 more this tax year. The remaining allowance is simply the limit less amounts already subscribed in the same year.

  1. ALimit £20,000; further £13,000Correct
  2. BLimit £20,000; further £7,000
  3. CLimit £7,500; further £500
  4. DLimit £20,000; further £20,000

Explanation

The overall ISA investment limit is £20,000. Since £7,000 has already been subscribed this year, the remaining capacity is £20,000 - £7,000 = £13,000. Option £7,000 wrongly treats the amount used as the amount remaining, and £7,500 is the rent-a-room limit.

Did you get it right without looking?

One question tells you little. A timed set on The overall function and purpose of taxation in a modern economy shows your real accuracy, how long you take and where you lose marks.

Practise The overall function and purpose of taxation in a modern economyFree diagnostic mock

More The overall function and purpose of taxation in a modern economy questions