How do you complete the CII R03 exam in just 60 minutes?
Last updated on January 26th, 2021 at 10:36 am
The CII R03 exam continues to be one of the hardest exams to pass at diploma level. The main complaint from candidates is the way the questions are worded and that 60 minutes is not long enough to answer 50 questions, particularly when 15 of those are multiple-response. Here we give you some strategies that will help your exam preparation.
THIS ARTICLE IS RELEVANT TO EXAMINABLE TAX YEAR 2020/21.
It seems that the time pressure for R03 is enormous; we hear from many candidate who run out of time. This exam must not be under-estimated and preparation, (key of course to success in all exams), must be fully completed by the time you’re sat in front of the computer waiting for the signal to start.
Topics Sure to Appear on the R03 Exam
One thing you can be sure about is that you will be tested on bond taxation (sometimes more than once!), national insurance, inheritance tax and basic income tax calculations (with questions designed to test your ability to apply the PSA and dividend allowance) and occasionally a question on the 0% rate for savings. The last area here often causes problems for delegates so make sure you practise – take the personal allowance from the earned income, and if you’ve got less than the 0% band threshold left, then you can use the 0% rate against the savings income (up to that threshold). If you see a question with a relatively low amount of earned income with some savings income, then it’s probably this they’re testing you on. If earned income is £17,500 or more, then the starting rate for savings is not available. If someone has earned income of £17,000 and gets £200 interest on savings, then the personal allowance is applied against the earned income leaving £4,500; this then reduces the starting rate for savings by £4,500 to £500, which means, in this example, there is no tax on the interest.
Use the CII Exam Guide
It is essential that the CII exam guide is used to practise with, as this does give a very good idea of the type of questions that you will be faced with in the exam. The question stems are often quite long, but the more you practise, the more easily you will be able to see what it is they are actually testing you on. On the day, this will mean you can apply the new information, ie the figures, to the formula that you’ve been practising.
Standard Question: Transferable Nil Rate Band
Another very standard question is around the transferable nil rate band. Here’s an example question:
Geraldine died in the 2004/2005 tax year using 40% of the then standard nil rate band for IHT of £263,000. If her husband dies in this tax year, how much standard nil rate band can be applied for by his personal representatives?
Geraldine’s husband’s legal personal representatives can apply for his standard nil rate band of £325,000, plus Geraldine’s unused standard nil rate band at 60% of £325,000 = £195,000, giving a combined standard nil rate band total of £520,000
Practise the Calculations
There’s no magic formula for passing R03 in the time given, but practising the calculations that come up time and time again will mean on the day you will be ready.
Grab the resources you need!
If you’re studying for your CII R03 exam, and you don’t want to waste precious time figuring out the calculations, you’ll need to be well prepared. Grab our free taster to try out one of Brand Financial Training’s calculation workbooks for yourself. Click the link to download the R03 calculation workbook taster now!