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ACCA Applied Skills · Taxation (UK) · Property and investment income

Priya, a UK resident, subscribes £12,000 to a cash ISA and £9,000 to a stocks and shares ISA in the same tax year. Using the overall investment limit of £20,000, what is the maximum amount she was entitled to subscribe across all her ISAs, and by how much has she exceeded it?

The overall ISA limit is £20,000 across all ISAs together. Priya subscribed £12,000 plus £9,000, which is £21,000, so she exceeded the limit by £1,000. The limit is not applied separately to each ISA type.

  1. A£20,000 limit; exceeded by £1,000Correct
  2. B£20,000 limit; exceeded by £9,000
  3. C£40,000 limit; not exceeded
  4. D£20,000 limit; not exceeded

Explanation

The overall ISA investment limit is £20,000 across all ISAs combined. Priya subscribed £12,000 + £9,000 = £21,000, which exceeds the limit by £1,000. The limit applies per type only if separately stated, but here it is an overall limit, so £9,000 is not the excess.

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