How do you complete the CII R03 exam in just 60 minutes?
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 2017/18.
It seems that the time pressure for R03 is enormous; we heard from one student who reached the last question just as the time had run out. It is clear then that 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 10% 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 10% band threshold left, then you can use the 10% 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 £16,500 or more (£16,850 in 2018/19), then the starting rate for savings is not available. If someone has earned income of £16,000 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.There’s no magic formula for passing the #CII #R03 exam in the time given, but here are some strategies that will help. Click To Tweet
Standard Question: Transferable Nil Rate Band
Another very standard question is around the transferable nil rate band. Here’s an old exam question:
George died in the tax year 2002/2003, using just 60% of the then Inheritance Tax nil-rate band of £250,000. As a result, if his widow dies in the tax year 2017/18, her administrators can apply for the nil-rate band, in effect, to be extended to:
You’re told that 60% of the nil rate band has been used. This means that 40% has not been used and it’s this percentage that can be carried forward. 40% of the current NRB is £130,000 and so you add this to the widow’s full NRB of £325,000 to get the answer B of £455,000.
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!