Checked 25 October 2026. The format facts were read on the CII’s R03 syllabus and examination guide for 2026/27 on 25 October 2026. The three questions use the CII’s tax tables for exams from 1 September 2026 to 31 August 2027 (tax year 2026/27).
R03 practice questions are most useful in the exam’s own shape: 50 questions in one hour, 39 standard and 11 multiple response, on the 2026/27 tax year. Below are three questions worked through, one of them a full Income Tax calculation and one a multiple response question, with the explanation behind each answer. They come from our own independent R03 practice test, written to the CII’s 2026/27 syllabus with every tax rate, band and allowance taken from the CII’s 2026/27 exam tax tables. The CII’s own specimen examination is in its R03 examination guide, which you can download from its R03 unit page; use that too. ProSyllabus is an independent study site. It is not affiliated with the Chartered Insurance Institute (CII), and nothing here is official. Every exam fact and tax-table figure below is quoted or summarised from the CII’s own pages and documents, and the tax rules behind the worked questions from HMRC’s own guidance, read on 25 October 2026.
Three worked R03 questions for 2026/27
Each question is printed exactly as it appears in the ProSyllabus CII R03 practice test, with the explanation the test gives after you answer.
Question 1 · LO1 The UK tax system
In 2026/27 Leila's only income is a salary of £15,000 and bank interest of £3,000. She is not a Scottish taxpayer. How much of her interest is taxed at 0% under the starting rate for savings?
- £1,000
- £5,000
- £3,000
- £2,570
Answer: D. Her personal allowance of £12,570 is set against her salary first, leaving £2,430 of taxable non-savings income. The £5,000 starting rate band for savings is reduced by taxable non-savings income: £5,000 - £2,430 = £2,570 of her interest is taxed at 0% under the starting rate. The remaining £430 falls within her £1,000 personal savings allowance as a basic-rate taxpayer, so none of her interest is taxed (CII tax tables 2026/27: starting rate of 0% on savings income up to £5,000, for non-savings income less than £17,570).
From the ProSyllabus CII R03 practice test: an original question, not a CII specimen or exam question. It is one of that test’s three free questions.
Question 2 · LO4 Applying personal taxation to investment advice
In 2026/27 Megan has a salary of £45,000, bank interest of £1,200 and UK dividends of £2,000. She is not a Scottish taxpayer and has no other income. What is her total Income Tax liability?
- £6,647.25
- £6,741.00
- £6,687.25
- £6,887.25
Answer: C. Step 1, salary: £45,000 - £12,570 personal allowance = £32,430 taxable, all at 20% = £6,486.00. Her total taxable income is £35,630, below £37,700, so she is a basic-rate taxpayer with a £1,000 personal savings allowance. Step 2, interest: the starting rate for savings does not apply (her taxable non-savings income exceeds £5,000); £1,000 is taxed at 0% and £200 at 20% = £40.00. Step 3, dividends: £500 dividend allowance at 0% and £1,500 at 10.75% = £161.25. Total £6,486.00 + £40.00 + £161.25 = £6,687.25 (CII tax tables 2026/27).
From the ProSyllabus CII R03 practice test: an original question, not a CII specimen or exam question. It is one of that test’s three free questions.
Question 3 · LO2 Taxation of investments · multiple response
In 2026/27 Jasmine is a basic-rate taxpayer. She holds a UK onshore investment bond. Which of the following statements about its taxation are correct?
- If she surrenders the bond and the whole gain falls within her basic-rate band, she has no further Income Tax to pay on it.
- Any gain on surrender is subject to Capital Gains Tax at 18%.
- She can withdraw up to 5% of her premium each policy year, cumulatively, for 20 years without an immediate tax charge.
- If a gain takes her into the higher-rate band, she may have further tax to pay on the part above the basic-rate band.
More than one statement is correct. Choose the option that lists every correct statement and no other.
- 2, 3 and 4 only
- 1, 3 and 4 only
- 1, 2 and 4 only
- 1 and 3 only
Answer: B. Statements 1, 3 and 4 are correct. An onshore bond's gain carries a notional 20% credit because the fund has been taxed, so a basic-rate taxpayer pays nothing more on a gain within the basic-rate band; any part falling in the higher-rate band is taxed at 40% less the credit, subject to top-slicing relief. The cumulative 5% withdrawal allowance defers tax. Bond gains are subject to Income Tax, not Capital Gains Tax.
From the ProSyllabus CII R03 practice test: an original question, not a CII specimen or exam question. It is one of that test’s three free questions.
| Question | Learning outcome | Answer |
|---|---|---|
| 1 | LO1 The UK tax system | D: £2,570 |
| 2 | LO4 Applying personal taxation to investment advice | C: £6,687.25 |
| 3 | LO2 Taxation of investments | B: 1, 3 and 4 only |
The table repeats the three answers for readers on a version of this page that does not show the cards.
How multiple response questions are scored
In the real exam a multiple response question has between four and six options, and the examination guide says: “For each question more than one option is correct. Candidates must select all the correct options to gain the mark.” In our practice test the player takes one answer per question, so each of our multiple response questions lists numbered statements and you choose the one option that names every correct statement and no other, as in the multiple response question above; you score only if you pick that option.
Using a timed mock well
| Step | What to do (our suggestion) |
|---|---|
| Time it | Sit 50 questions in one hour in one go: 72 seconds a question on average (our arithmetic). Calculations take longer, so do not linger on a wording question you cannot settle. |
| Use the tables | Practise with the CII’s published 2026/27 tax tables open rather than from memory or an older year’s figures. The exam provides extracts from tax tables, and the CII says its published copies may differ from them in some detailed figures. |
| Score by learning outcome | The CII’s own feedback reports the percentage you answered correctly on each learning outcome. Do the same with a mock, and compare your total with the 65% standard pass mark: 33 of 50 is the first whole score at or above it. |
| Rework every calculation you missed | Follow the explanation step by step, and check which band the income falls in and how much of each allowance is left. |
The format facts are from the CII’s R03 syllabus and examination guide for 2026/27. The R03 format guide sets out every learning outcome, its number of questions and some of the 2026/27 tax-table figures.
Reading your mock score
| Correct answers out of 50 | Against the 65% standard pass mark | What we would do next (our suggestion) |
|---|---|---|
| 36 or more | Comfortably above | Keep one timed mock for the week of the exam; rework every calculation you missed. |
| 33 to 35 | At or just above | Too close to rely on. Work on your weakest learning outcome, then sit another timed mock. |
| 30 to 32 | Just below | Go back to the study text for the outcomes where you dropped most marks, and redo the calculations step by step. |
| 29 or fewer | Well below | Finish the study text before another timed mock; use a mock to find gaps, not to learn the material. |
The same comparison without the tool. The 65% standard pass mark is from the CII’s R03 unit page; the bands and suggestions are ours. The CII adjusts marks where necessary for the difficulty of each exam version.
Traps to watch for in R03 questions
| Trap | What happens | What to do (our suggestion) |
|---|---|---|
| The wrong tax year | The 2026/27 syllabus examines the 2026/27 tax year from 1 September 2026. The 2026/27 tables give, for example, basic and higher dividend rates of 10.75% and 35.75% and a Business Asset Disposal Relief rate of 18%. | Revise from the CII’s 2026/27 tables, and check any figure in older notes against them. |
| The shrinking starting rate for savings | GOV.UK says: “Every £1 of other income above your Personal Allowance reduces your starting rate for savings by £1.” The CII 2026/27 tables give the starting rate “For non-savings income less than £17,570 only”. | Work out how much of the £5,000 band is left before you apply the personal savings allowance. |
| Which band decides the allowance | GOV.UK says that to work out your tax band you add all the interest you have earned (or, for dividends, your total dividend income) to your other income; the personal savings allowance is £1,000, £500 or nil depending on that band. | Add the savings and dividends to the other income first, then decide which allowance applies. |
| Negative wording | The examination guide says negative words are emphasised in capitals, for example NOT and CANNOT. | Read the stem twice when it contains a capitalised word. |
| Multiple response needs every correct option | The guide says: “Candidates must select all the correct options to gain the mark.” | Judge each option on its own as true or false before you look at how many you have ticked. |
The traps are drawn from the CII’s R03 syllabus, examination guide and 2026/27 tax tables and from GOV.UK’s pages on tax on savings interest and on dividends; the suggestions are ours.
Official practice from the CII
The CII’s R03 examination guide for exams from 1 September 2026 to 31 August 2027 can be downloaded from its R03 unit page. It contains a specimen examination with specimen tax tables, the answers and the learning outcome each question covers. The CII’s Knowledge Checker is a set of multiple-choice questions on the study text, and Revision Extra, sold separately, includes practice questions.
Frequently asked questions
Where can I find CII R03 practice questions?
The CII’s R03 examination guide, on its R03 unit page, contains a specimen examination with answers. Its Knowledge Checker and Revision Extra add practice questions. Independently, the ProSyllabus CII R03 practice test has two full 50-question exams for the 2026/27 tax year, three questions of which are free and worked through on this page.
Are the questions on this page real R03 exam questions?
No. They are original questions written to the learning outcomes of the CII’s 2026/27 R03 syllabus. They are not CII specimen or exam questions and the CII has not written or endorsed them.
Which tax year do these questions use?
The 2026/27 tax year, with every figure from the CII’s tax tables for exams from 1 September 2026 to 31 August 2027.
How long should an R03 mock take?
One hour for 50 questions, the time the real exam allows.
How are R03 multiple response questions marked?
The examination guide says candidates must select all the correct options to gain the mark.
More in this series
Sources
- official — CII: R03 examination guide for exams from 1 September 2026 to 31 August 2027 (published June 2026), with a specimen examination
- official — CII: R03 Personal taxation, examination syllabus, examined from 1 September 2026 to 31 August 2027 (published June 2026)
- official — CII: R03 Personal taxation 2026/2027, assessment criteria and indicative content
- official — CII: tax tables 2026-2027 (the supporting exam documents page lists them for R03 exams from 1 September 2026 to 31 August 2027)
- official — CII: Personal Taxation (R03), unit page with the assessment, testing position and exam guide updates (read 25 Oct 2026)
- official — CII: Understanding your exam result (how marks are moderated)
- official — HMRC: Gains on UK life insurance policies, Self Assessment helpsheet HS320 (2026)
- official — GOV.UK: Tax on savings interest (starting rate for savings and Personal Savings Allowance)
- official — GOV.UK: Tax on dividends
official = a document published by the conducting body. reported = a news or coaching site we could not check against an original. Where sources disagree this page says so rather than picking one.
