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Hot Topic – CII R06 and AF5 – October 2013

Hot Topic – CII R06 and AF5 – October 2013

Hot TopicAre you sitting either of the above exams next week?   If so, you will of course have received the case studies and fact find.  Here at Brand Financial Training we’ve worked hard on producing case study analysis for R06 and fact find analysis for AF5 to help get you through your exams.

Here are some initial thoughts.

R06 –there is a lot to case study 1 and a lot of preparation will be needed to be fully prepared for every possible angle and question.  One big factor is of course the fact that Graham and Mary have a child physically handicapped as the result of a car accident and their first aim is to ensure that she is cared for both now and in the future.  Will there be a question on the State benefits they can claim or will it concentrate solely on the type of trust they should use to hold the compensation pay-out and the resulting tax treatment for Jane as a ‘vulnerable beneficiary’.  Research will be needed if this is unknown territory.  You will have noticed too that Graham has income over £100,000 so there could be a calculation here to work out his personal allowance.  Case Study 2 covers some old ground from previous papers – although holding property in a SIPP may involve some prior research and again a client with income impacting on their personal allowance with plenty of tax planning opportunities for her.

AF5 – no great surprises here – we have protection issues, retirement issues and potential inheritance tax planning.  Not so standard is a daughter from a previous marriage where the father has no will potentially leaving her vulnerable. An income tax calculation could be likely as the IHT calculation looks too easy for AF5 standard and the income tax for Jane throws up some interesting planning opportunities and Philip’s total earnings means he is subject to the child benefit tax charge.

AF5 is fairly formulaic with the ‘fact finding’ question for immediate and long term objectives;  often a ‘recommend and justify’ question and usually a calculation as well as a ‘comment on’ the protection or retirement objective.

For both exams you need an answer up your sleeve to the ‘review question’ – this has come up in the majority of R06 and AF5 past exams and there’s really no excuse for not getting maximum or almost maximum marks.

The key to a successful pass in both these exams is of course preparation; you need to be confident that you have considered, researched and prepared every possible scenario that all sets of client present.  There might be a curve ball question that no one can predict but it should only be a worth a few marks.

For our full analysis of October’s R06 case studies and AF5 fact find and information on our email support please go to:

Good luck to all those taking exams next week.