Found something here...
something takes the cake
something is the most extreme example. I've known some jerks but you take the cake.
Usage notes: usually said about something bad
I don't think that is the usual usage. The original usage i think meant winning a prize, so let's say Farmer Fred entered his marrows into a vegetable competition. If he won, his marrows would have "taken the cake". It could also be used in this way; lets say before the marrows are judged and prizes awarded some folks are viewing the lovely veggies on offer. Mr Barney sees Farmer Fred's marrow and says to Mrs Betty, "well, if that there marrow doesn't take the cake?" Expressing a surprise at any other outcome than the marrows winning the competition.
Thats what taking the cake means to Americans.
I disagree. saying "that takes the biscuit" in English would mean that you think something or an outcome is so surprising it couldn't true or correct or that it is the last straw.