CII R03: the five myths


CII R03: the five myths

In this blog, i’ll look at five commonly believed myths about the CII R03 exam. Like any exam, it helps if you understand what type of exam it is. It’s just as important to know the type of exam it isn’t.  So, if you want to pass R03 first time, read on and go into the exam with your eyes open.

Myth 1. As R03 is only worth 10 credits, it’s nice and easy.

Really, I don’t think so. More importantly, the CII exam statistics show that the pass rate for R03 – at 56% in 2019 (the latest figures available) – is THE hardest CII R0 exam.  So why is this?
1. Around 11 out of the 50 questions are multiple response questions. This means that there will be more than one correct answer to get a mark. These are much more difficult than the one from four standard question.  Work on the basis that if you get 50% of these correct, you are doing well; and

2. There is a lot to do in the typical R03 exam.  This is partly to do with calculations (see myth 4) and the length of some written questions to ensure what they are asking you is precise.

Click here to read a students guide to taking R0 exams

Myth 2. When completing the CII R03 exam, you should be comfortable for time.

This is probably the biggest myth. The CII R03 exam lasts for 1 hour and in that time, you have to answer 50 questions – that’s one question every 72 seconds. Very few people will come out of the R03 exam thinking that they had plenty of time. In fact, quite the opposite.

So apart from being aware of this, what can I do? Firstly, you need to practice lot’s of questions before you go into the exam.  This will get you familiar with the ‘style’ of the questions in the exam. Secondly, be aware of the information that is provided in the tax tables for the R0 exams. These include most of the information that you will need to carry out calculations. Familiarise yourself with these and don’t feel you have to remember, for example, the personal allowance for income tax, national insurance rates, stamp duty rates, or the annual exemption for CGT. All are provided for you.  If you are aware of this, and you know where to find the figures, it’ll save you some precious time in the exam.

Myth 3.  I just need to read some parts of the CII R03 study text.

This is a yes and no moment. We generally caution against reading all of a CII study text.  The general principle is that you ‘learn by doing’. It’s not how much study you do, but how effective it is so we suggest that most people should usually start with practice questions, continue to do so throughout your study and finish with them.  If you’ve previously completed the CII’s CF1 exam, then this has a dollop of tax in it that will help with R03. If you’ve completed R02, you’ll have some knowledge of how investments are taxed if nothing else.

That said, there are no obvious areas in R03 where there are likely to be a limited number of questions so it is difficult to ‘cherry pick’. The table below shows an overview of the syllabus cross referenced to the CII study text:

R03 syllabus learning outcome 
Number of questions
Chapters of CII R03 text 
Understand the UK tax system
15 standard format questions
Largely chapters 1, 2 and 3 but also elements from 4, 5, 6, 7, and 8
Analyse taxation of investments
8 standard format/ 7 multiple response
Chapters 9 and 10
Impact of tax on individuals and trusts
6 standard format/ 4 multiple response
Chapter 11
Undertake calculations and recommend tax planning solutions
10 standard format questions
Chapter 12

Many of you will have some experience of the UK tax system before attempting R03. You are likely to know the areas you are least comfortable with so focus on these chapters first.

Click here for the link to the R03 exam syllabus

Myth 4. R03 is all about calculations.

With it being a tax exam, don’t be surprised if you have to face some tax calculations. The good news is that these are only likely to be 10-20% of the questions and people generally over-estimate the numbers they will actually face.  The examiners can only ask you to do so much in the time available so if there is a full tax calculation, it will be relatively straightforward. The bad news is that the examiners can ask you to do part of a calculation. For example, calculate someone’s taxable income as opposed to their tax payable (which is a very different proposition). As ever, you need to read the question closely.

Myth 5. There isn’t much support material around for R03.

Yes there is, if you know where to look. When you enter for the exam, you can either buy the CII enrolment or enrolment plus packages. Both provide you with the CII R03 study text and access to their on-line CII RevisionMate resource. This includes ‘FREE’ multiple choice questions, split between each chapter.  The standard of these is broadly equal to that in the actual exam so they are well worth using.

In addition, depending on which option you pay for, you’ll also get access to further practice questions, audio material and key fact booklets. Click here for more details of what you will get.

If you like learning on the go, click here for details of our R03 audio material

There are plenty of other commercial training providers who will also offer practice questions and alternative study texts.  Just Google ‘CII R03 exam’ and see what you come up with.

Until the next time…

The Diploma Doctor


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