The Main Changes in the 2024-25 CII R05 Study Text
Here, we take a look at the main changes that you’ll come across in the 2024/25 version of the CII’s R05 study text. As there have been no significant syllabus changes, the majority of the amends stem from the Autumn Statement 2023, the Spring Budget 2024, and the turning of the tax year.
This article is correct as at 4 July 2024 and is relevant to the 2024/25 examinable tax year.
R05, Chapter 1
The figures in this chapter have been updated throughout, but we do not list the changes here as they are for background information and will not be tested in the examination.
R05, Chapter 2
It’s noted that the number of non-pension Excepted Group Life policies has grown rapidly in recent years.
R05, Chapter 3
State Benefits
The weekly State benefit figures are updated in this chapter. Thankfully, we don’t need to learn these by rote as many can be found in the tax table that you will have access to in your R05 exam.
The income threshold for the high income child benefit charge rises from £50,000 to £60,000. Rather than the tapered charge applying between £50,000 and £60,000, it will apply between £60,000 and £80,000. Once income exceeds £60,000, there will be a 1% charge for every £200 over, with the charge reaching 100% at £80,000.
The study text now notes that Tax Credits (Child Tax Credits and Working Tax Credits) are ending on 5th April 2025. Universal Credit takes over for those under State Pension Age (SPA), Pension Credit for those over.
The content on housing benefit has been cut, reflecting the fact this is now a legacy benefit for most people (existing claimants are being transitioned to Universal Credit). New claims can only be made by those who:
- have reached SPA; or
- are in temporary, sheltered, or supported housing.
Class 2 National Insurance Contributions (NICs)
No self-employed person is required to pay Class 2 NICs, although if they earn under the small profits threshold, they can be paid voluntarily by those who wish to build up entitlement to the New State Pension. Those earning above the small profits threshold will be deemed to have paid Class 2, without actually having to pay it.
R05, Chapter 4
The lump sum and death benefit allowance (LSDBA) is £1,073,100. This is the same figure as the lifetime allowance (LTA) that it replaced and is the maximum that can be taken tax-free from an individual’s accumulated pension funds during lifetime and on death, unless they have a protected right to a higher amount.
R05, Chapter 5
Qualifying Rules
Section 5A1 has been streamlined. The table which contained a comparison of the qualifying rules in four different scenarios has been replaced with easier to read paragraphs on the rules as they relate to whole of life assurance and endowments. The rules regarding term assurances have been removed.
The content on joint life policies, family income benefits, children’s policies, connected policies and backdating has also been removed.
Qualifying Status
Detailed content regarding why a policy may become non-qualifying has been removed, and it is simply noted that this is something that could happen if a policy is substituted or varied.
Pure Protection Policies
References to the qualifying status of pure protection policies have been removed.
Restricted Relief Qualifying Policies (RRQPs)
As a result of removing some detail earlier on, it is noted that in some cases, a policy will be partly qualifying and partly non-qualifying as a result of the rule £3,600 change.
Intestacy
The study text confirms that the intestacy threshold for spouses and civil partners is now £322,000 (compared to £270,000 prior to its change in July 2023).
R05, Chapter 8
The weekly long-term care payment levels, personal expenses allowances, State benefits, and capital thresholds for LTC have all been updated for the current tax year.
The capital gains tax (CGT) annual exempt amount has fallen to £3,000.
R05, Chapter 11
It is now confirmed in Chapter 11 that the reason a buy-and-sell agreement is not eligible for IHT Business Relief is that it is a binding contract. Business Relief does not apply to binding contracts.
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