R03 ISAs and child trust funds: free practice questions

1. Question 1 of 5

   What are the 2026/27 subscription limits for adult ISAs, Lifetime ISAs and Junior ISAs?

   Option A: £20,000 overall, £4,000 Lifetime ISA, £4,368 Junior ISAOption B: £20,000 overall, £4,000 Lifetime ISA, £9,000 Junior ISAOption C: £20,000 overall, £9,000 Lifetime ISA, £4,000 Junior ISAOption D: £12,000 overall, £4,000 Lifetime ISA, £9,000 Junior ISA

   Show answer

   The answer is B: £20,000 overall, £4,000 Lifetime ISA, £9,000 Junior ISA

   Adults can subscribe £20,000 across cash, stocks and shares, innovative finance and Lifetime ISAs (the Lifetime ISA capped at £4,000). Junior ISAs and CTFs take £9,000 a year. These limits are frozen until 5 April 2031.

   Why the other options are wrong

   A

   The Junior ISA limit is £9,000.

   C

   The Lifetime ISA and Junior ISA figures are the other way round.

   D

   The overall limit is £20,000.

2. Question 2 of 5

   Which person can subscribe to an adult cash ISA in 2026/27?

   Option A: A non-resident who isn't a Crown employeeOption B: A UK 17-year-old who has just started workOption C: A UK-resident 18-year-oldOption D: A couple opening an ISA jointly

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   The answer is C: A UK-resident 18-year-old

   Adult ISA subscribers must be 18 or over and UK resident (or a non-resident Crown employee or their spouse). ISAs are individual: they can't be joint, assigned or put in trust.

   Why the other options are wrong

   A

   Non-residents (other than Crown employees and spouses) can't subscribe.

   B

   Adult ISAs require age 18 or over.

   D

   ISAs can't be held jointly.

3. Question 3 of 5

   An ISA holder moves abroad and becomes non-UK resident. What happens to the ISA?

   Option A: It loses all tax benefits immediatelyOption B: It must be closed within 30 days of leavingOption C: Subscriptions can continue up to £20,000 a year as beforeOption D: It keeps its UK tax benefits, but no new money can go in

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   The answer is D: It keeps its UK tax benefits, but no new money can go in

   Someone who stops being UK resident can keep their ISA with its UK tax benefits, but can't pay in again until they're UK resident (local tax may apply abroad).

   Why the other options are wrong

   A

   The UK tax benefits continue.

   B

   It doesn't have to be closed.

   C

   No new subscriptions are allowed while non-resident.

4. Question 4 of 5

   Which statement about child trust funds is correct?

   Option A: New CTFs can still be opened for children born todayOption B: Parents can withdraw money early to pay school feesOption C: The yearly £9,000 limit runs from the child's birthdayOption D: Income over £100 from a parent's contributions is taxed on the parent

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   The answer is C: The yearly £9,000 limit runs from the child's birthday

   CTFs (for most children born 1 September 2002 to 2 January 2011) take up to £9,000 a year, with the year starting on the child's birthday. Funds are locked until 18 (except terminal illness), and can transfer to a Junior ISA or, at maturity, an ISA.

   Why the other options are wrong

   A

   CTFs were for children born from September 2002 to 2 January 2011.

   B

   Withdrawals before 18 are only allowed if the child is terminally ill.

   D

   CTF income is exempt from the parental settlement rule.

5. Question 5 of 5

   Which of these statements about Junior ISAs are correct? 1. Up to £9,000 can be paid in for 2026/27. 2. Income from a parent's contributions isn't taxed on the parent. 3. The child can withdraw the money from age 16. 4. The £9,000 can be split between cash and stocks and shares.

   Option A: 1 and 2 onlyOption B: 1, 2 and 4 onlyOption C: 2, 3 and 4 onlyOption D: 1, 2 and 3 only

   Show answer

   The answer is B: 1, 2 and 4 only

   Junior ISAs take £9,000 a year from anyone, split as wished between cash and stocks and shares. Parental contributions don't trigger the £100 rule, and the money is locked until 18.

   Why the other options are wrong

   A

   The limit can also be split between cash and stocks and shares.

   C

   Statement 1 is correct; statement 3 isn't.

   D

   The money is locked away until the child is 18.

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