The CII AF1 September 2025 Exam in Review

The CII has released their papers from the exam sittings that happened in September.  In this article, we look at what was tested this time round in AF1: the Personal Tax and Trust Planning paper. 

This article is correct as at 18 November 2025.

You can find the exam guide here*. 

Question 1  

In the first case study we met Charlie, a widower with two adult sons, Stan and Jakub.  Charlie’s wife had died two years previously. Further down the case study we met Philippa, Charlie’s mother who had died in June. We then discovered she had gifted her own home to Charlie and his sister Rose in 2019.

The exam started with an explain question and a calculation; firstly candidates had to explain whether any IHT was paid on two lifetime transfers that Philippa had made.  She had transferred into a discretionary trust for the grandchildren and, five years later, made PETs to both Charlie and Rose. Candidates had to demonstrate firstly knowledge of how the transfers are treated at the time and then in the calculation, how the transfer in 2015 impacts the PETs made in 2020.

Next came a question that may have been challenging as not something that is tested very often; candidates had to describe the IHT consequences for Philippa of transferring legal ownership of her home to Charlie and Rose on 1 June 2019 if she had firstly, lived in it rent free until her death and then in part (ii), if she had paid £2,000 per month in rent from 2021 until her death.  This is quite a technical area and with quite a lot of marks on offer, we feel some of the more general knowledge would have been known but perhaps not some of the finer detail.

Luckily the next question was an old favourite and if marks were lost in the previous question they could have been recovered here; candidates had to explain the responsibilities of legal personal representatives regarding Income Tax and Capital Gains Tax.

Following this was another old favourite, the duties of trustees; firstly in respect of the investments and secondly when distributing capital to two of the beneficiaries.

These two questions are typical levels of knowledge needed to pass this level 6 exam.

Next, the exam tested how the deceased spouse’s ISA will be administered following her death, and in part (ii) the rules regarding the Additional Permitted Subscription.  Some of the information is quite specific here but as long as the main detail was known, then candidates should have picked up a good number of marks.

The exam then moved to one of the children, Stan, who had left the UK to stay in France early on in the tax year.  The first question was for just three marks and asked for Stan’s residence status for 2025/2026. Next for four marks, candidates had to explain the consequences of Stan moving to France on his Stocks and Shares ISA and finally the CGT position should Stan decide to sell his GIA in March 2026.

This part of the syllabus often causes headaches for candidates but this question seemed to be fairly straightforward with the date of departure given as 12 April meaning that he would only have been resident for just a few days.

The final question brought in the other son, Jakub who was separating from their partner. In this last question candidates had to describe the CGT implications for the couple if their jointly owned investment portfolio is transferred between them first when they separate and then following divorce.  This tested some relatively recent rule changes which had been tested previously.

Question 2

In this question we met Rory, aged 48, a divorcee with one 19-year-old daughter, Ciara.

Rory was employed with a bonus, half of which was being paid into his employer’s bonus sacrifice scheme.  He had various types of income and an OEIC invested in a reporting and non-reporting fund.

A discretionary trust had been set up for Ciara and the trust held an offshore bond.  One of the trustees was moving abroad for two months.

Firstly, candidates had to calculate Rory’s Income Tax liability ,and the only real complication here was how the non-reporting fund income is dealt with and the sacrifice of the bonus.  Even if candidates were unsure of these technicalities, the rest of the calculation should have been straightforward.

Next was how offshore bonds are taxed when trustees make a full surrender.  The testing point here was that Rory was still alive and therefore HMRC will look to assess him.

The exam followed with a factors question; candidates had to state the factors the trustees should consider when reviewing the investments held in trust.  These questions usually follow a generic format and should mean marks are picked up fairly easily.

In each exam there tends to be a question on powers of attorney; this session it was the turn of the general POA to be examined.

The final question asked for an explanation of how Rory’s home would be treated for IHT purposes should he die in this tax year and the technicality here to note was that Rory had a mortgage outstanding  which affects the maximum amount of residence nil rate band.

Question 3

The final question in the exam involved a married couple in their early 70s. Details of shareholdings were given with shares bought at different times.  They also had an IHT liability which they were considering mitigating by making various gifts.

The first question was the expected CGT calculation on a disposal of his pooled shares.  This calculation has been tested various times over the years so anyone that had carefully studied old exam guides should have picked up some good marks here.

The next question could have been a slight curveball to some; candidates had to explain a bonus issue and a rights issue and in both cases how they impact on the share pool.  The marks were small (only 3 marks for each) so even if no knowledge was known, it should not have meant a fail if other areas were answered well.

The calculation that followed was for the SLDT on the proposed purchase of an investment property and with the figures available within the tax table provided, this should have been five of the easier marks to attain.

Next came a question on how any future rental income will be taxed on the couple and finally candidates had to explain the IHT implications if they were to die within seven years of making their proposed gifts and also describe a protection strategy to cover any IHT on those gifts.  This area has been tested in the past but to get maximum marks candidates would have needed to remember both the loss of NRB for seven years and the potential liability on the PETs.

Overall, the exam covered the usual calculations of income tax, CGT and IHT with some extra nuances on those taxes as well.  Powers of attorney questions should always be expected as well as some test of the residence rules.

Comparison with the February 2025 Exam Paper 

Let’s look at what was tested in February 2025’s paper. This exam guide can be found here.  

The topics covered were:

• Calculation of adjusted net income and an income tax liability.
• Planning with charitable donations.
• Self-employed tax – basis of assessment.
• National Insurance contributions for the self-employed.
• VAT and flat rate scheme.
• Wills and divorce.
• 18 to 25 trusts.
• Remittance basis.
• Private residence relief.
• CGT calculation including chattels and negligible value claims.
• Tax treatment of income paid from an IIP trust.
• Income tax and the use of the personal allowance.
• IHT calculation including quick succession relief.
• Deeds of variation vs disclaimers.
• Drawbacks of enduring powers of attorney.

As you can see an entirely different set of syllabus topics was tested in February, demonstrating once more that candidates should spend time looking at as many past papers as possible, ensuring plenty of practice of the main calculations that generally appear in each exam.

Grab the resources you need!

Preparing for the CII AF1 exam? Build your confidence with our free calculation workbook taster and experience the quality of Brand Financial Training’s resources for yourself. Download it now to start practising effectively.

* The CII has updated their retention policy and now only provides the last two exam papers. Older papers referenced in this article may no longer be available on the CII website.