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How to Pass the CII R03: Why do Candidates Fail this Exam?

With one of the lowest national pass rates of all the R0s, the CII R03 exam is definitely not a simple test of your knowledge of the subject.

In this article, we take a look at some of the main reasons why candidates fail and offer some BTS tips on how to pass the CII R03 exam.

If we start by taking a look at the language used in the learning outcomes within the syllabus we see: 

  1. Understand the UK tax system as relevant to the needs and circumstances of individuals and trusts. (15 standard format questions) 
  2. Analyse the taxation of investments as relevant to the needs and circumstances of individuals and trusts. (8 standard format and 7 multiple response questions) 
  3. Analyse the role and relevance of tax in the financial affairs of individuals and trusts. (6 standard format and 4 multiple response questions) 
  4. Apply the knowledge of personal taxation to the provision of investment advice (10 standard format questions) 


Digging deeper into the learning points in each learning outcome we also find lots of command words like; explaindescribecalculate and recommend. 

All of this means that to pass the CII R03 requires you to have a really good base knowledge that you will then apply in different ways.

R03 is an application exam, and all within a really tight timescale of 1 hour. 

How to Pass the CII R03 Why do candidates fail this exam
How to Pass the CII R03 Why do Candidates Fail this Exam

So, what are some of the key challenges in R03?

Let’s look at the time available first. BTS see lots of candidates who have used other study options come to us and say ‘I ran out of time in my R03 exam’. 

Time available

For R03, you need to answer 50 questions in 1 hour. Now, if the questions were all ‘simple’ knowledge-based, that wouldn’t be so bad. 

The problem is that there will be a lot of calculations, comparisons, and quite a few ‘best option for a client’ questions. Even the knowledge-based questions will often be worded as a mini-scenario. 

This means that to pass the CII R03 you need to take control of your time. 

For each question, you have to bear in mind that you only have (on average) 1 minute 12 seconds in which to answer it. If you take 3 minutes each on half a dozen of the questions, that’s around 15 questions that, in theory, you now have no time to answer… not a good situation to be in. 

Remember: unless you are looking to achieve a 100% pass score, you do not need to get every question correct. 

One strategy to consider is; for each question, decide straight away, ‘Can I answer this question in my 1 min 12 seconds, or just a bit over? If the answer is yes, crack on with it. If the answer is that you could probably do it if you took your time and spent 5 minutes on it (or you wouldn’t stand a chance even if you gave it the full hour), flag the question to come back to later and move on to the next question. 

Only come back to the flagged question(s) when you have completed all the others. 

How to Pass the CII R03 Why do Candidates Fail this Exam
How to Pass the CII R03 Why do Candidates Fail this Exam

Knowledge based questions

Rather than ask questions like ‘How do the self-employed pay their tax?’, knowledge-based questions will be phrased as scenarios, much like;

‘Mrs X pays her tax in three instalments. What does that tell you?’. Then, the options will include the correct self-employed answer and also three other reasonable-sounding options. 

And there lies the challenge. The alternative incorrect options in R03 rarely include silly or obviously incorrect answers. Instead, they will be very effective at doing their job of distracting you away from the right answer. Professional question writers call the incorrect answers ‘distractors’ for a reason! 

For knowledge-based questions it is always worth reading the questions, ignoring all of the options, and thinking of what the answer would be if you were going to answer it yourself. Only then look at the options and see which most matches what your answer. 

Calculation questions

It depends on what questions the system selects for you on the day, but you could get around 50% of the questions in your exam where you need to grab the calculator. 

Quite often they will be a tax calculation, either in full or in part. 

To pass the CII R03 you need to have a well-understood and a well-practiced process that you can call on in the exam for each of the potential tax calculation questions 

In fact, one of the most common reasons why candidates stress about calculation questions in R03 is that they see a calculation question and “don’t know where to start”. 

It’s very easy to miss out one part of the calculation process but still arrive at an answer that is one of the options available. The CII examiners are smart cookies, and have a good idea of the mistakes that candidates are likely to make along the way with calculation questions,  

We cover this in our study materials and workshops, but each of the tax calculations has a logical process that you can follow to arrive at the right answer. For income tax it’s an eight-step process, for CGT it’s a six-step version.  The following graphic is taken from the BTS R03 e-Learning module, showing the first of the six steps in the CGT calculation process.


Learning and practising all the steps for each of the calculation types, and importantly knowing which steps should be considered BEFORE you pick up the calculator, are skills that will serve you well to pass the CII R03. 

The BTS R03 e-Learning module uses graphics, tables and mnemonics to help you to remember the steps in a given calculation process.

Final points

For anyone new to taxation, R03 can be a real challenge. This is particularly true for R03 because a lot of the knowledge that you need in order to fully understand the subjects that come up early in the study text aren’t fully explained until later chapters. Often it’s not until a second read of the study materials that the content really starts to make sense! 

This is one of the challenges that BTS address in our learning materials. Rather than ignore content that is ‘covered later’ or inundate you with info you don’t need to know at that particular time, we tell you just enough about a subject so that you can understand the content you are studying at that time. That gives you a solid foundation of knowledge that we build on throughout or materials: STEP by STEP 

Choosing your materials – how exam standard are they?

The BTS question developers sit the R0 exams every year to keep our materials fit for purpose. The BTS Study Buddy App contains hundreds of exam standard questions to practise in the weeks leading up to the exam. All are as close to the exam standard as we can possibly get them.

Practise as many exam standard questions with the BTS App as you can to avoid a nasty shock in the exam.

Don’t just take our word for it…

“Delighted to pass R03 this morning, three down and three more to go! Thank you BTS! The workshops were invaluable and the study material from Bespoke Training Solutions Ltd was high quality.” Craig Rees | Financial Adviser | April 2021


View Our R03 Exam overview/toolkit to purchase any R03 Study support including Study Guides, e-Learning modules, online workshops and study buddy. 

Find out more in depth help and advise to structure your R03 studies by viewing our R03 Study Plan.

Chat with other R03 candidates in the dedicated BTS R03 online forum room to help keep up to date , find out any new information and gain help and advise from others.

Read another insightful article on ‘How to Pass the CII R03: Tips for Calculation Questions’ to find out more advice on the R03 Exam. 


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