2021/22

AF1

Preparation Guide

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Contents

Introduction 3

A. The AF1 Exam 4

B. Study materials 7

C. A study plan 10

D. Question types 12

E. Exam technique 14

F. AF1 Past Performance 16

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Introduction

The fact that you are reading this probably means that you will shortly be sitting the AF1 exam (or

considering doing so). This guide is designed to help you prepare for this examination and to maximise

your chances of success.

We’ll start with some good news and some bad news. The good news is that the underpinning

knowledge you will need for AF1 should have been covered at Diploma level. The bad news is that the

style of the AF1 exam is a very different kettle of fish to what most people will have experienced before

– if this is your first AF exam. The pass rate of only 44% suggests that you will need to be well prepared

and go into it with your eyes open.

This is what this guide is all about. Written by industry experts, it is intended to help in two ways:

1. It will give you an overview of the AF1 examination as a whole and how best to prepare for the

exam.

2. It also looks at the importance of good exam technique and shows you what you need to look for.

Technique can make all the difference.

It should take around 20 minutes to read.

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A. The AF1 exam

AF1 forms part of the CII’s suit of Advanced Diploma exams. It is a case study-based written exam

which is intended to test people’s knowledge of taxation issues and trusts. Being a level 6 exam means

that AF1 will test your ability to analyse and apply your knowledge and, as a result, is worth 30 credits

if you wish to achieve the CII’s ‘Chartered Financial Planner’ designation.

If you have completed your level four exam using just the R0 subjects, you will need a further 190

credits to achieve chartered status – at least 120 of these need to be at Advanced Diploma level. In

other words, you will need at least four ‘30 credit’ Advanced Diploma subjects including AF5.

How big a step up is it from Diploma?

Well, Advanced Diploma is based on the knowledge from the Diploma exams so in theory, there should

be nothing new they can throw at you. The AF1 syllabus is most closely based on the level 4 subjects

– R03 (Personal Taxation) and J02 (Trusts).

Those of you who are sitting AF1 having completed just the

RO exams won’t have enjoyed the experience of an exam

requiring written answers. The multiple choice format of R03

is very different – and some people find the process of

eliminating the wrong answers easier than staring at a blank

sheet of paper. On the other hand, you either get the answer

right or not with R03. There are no marks unless you get the

correct answer.

This is different to the J0 subjects and with AF1 where

written answers are required. You can get the wrong answer

on a calculation question - and still pick-up most of the marks

for following the correct process. As a final thought, there are areas you will have covered in R03 such

as VAT and corporation tax which will not be covered in AF1.

Back to the question: how much harder is it? If you have R03 (or the previous J01) and J02, you should

already have much of the underpinning knowledge for AF1. That’s the good news. The bad news is

that the case study approach to the AF1 exam is widely considered to be a harder test as it looks more

at the application of your knowledge, rather than recall. This reflects the fact that it is a Level 6 exam.

It is also likely to test more complex areas of the subject so preparation really is the key.

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AF1: What does it examine?

The abridged syllabus for AF1 is:

the UK income tax system and self assessment; capital gains tax and how tax liabilities are computed; social security benefits and tax planning; national insurance, how it is calculated and applied; tax treatment of different kinds of investments; impact of residence and domicile on an individual's liability to UK tax; legal principles of trusts; main types of trusts and their taxation; powers and duties of trustees, and power of attorney; consequences of making a will and dying intestate; bankruptcy rules and the role of the trustee in bankruptcy.

The elements of preparation

There are three key elements to both the exam and how you prepare for it:

Exam preparation

Most people would not be comfortable going straight into any exam without any prior preparation.

AF1 is no different and the CII suggest around 150 hours of study for this exam. We will cover the

various study options in the next section of this guide so at this stage, suffice it to say, completing

two or more past exam papers under exam conditions would be great preparation to help you to

understand the style of questions asked, and how to answer them. There are also likely to be

technical areas that you will need to revise or recap.

Exam preparation

The exam Post exam

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The exam

The exam lasts for three hours and this is worth 160 marks.

Like all AF written exam subjects, the pass mark is around 55%

which means you will need to achieve around 88 of the 160

marks to pass the exam. As the CII moderate their pass marks

(depending on how easy or difficult a particular exam is), it is

perhaps wiser to aim for a target of 90 marks to be absolutely

sure of a pass.

The AF1 exam is split into three compulsory case studies:

Case study 1 – 80 marks; and

Case studies 2 and 3. Between them, they are worth 80 marks

(and this is usually split equally between the two).

The 55% pass mark is based on achieving this total of marks across the whole exam; it is not necessary

to achieve 55% in each case study.

Post exam

As AF1 is a written exam, it takes the CII around eight weeks to mark and publish the exam results.

The actual results date will be confirmed by the CII.

If you are successful, then now is a good time to celebrate! If you fail by a narrow margin, you can

request a clerical check of the marks at no cost, or a re-mark. The latter will cost an additional fee

(refundable if you are successful).

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B. Study materials

None of the AF subjects (AF1-5) have a study guide because the technical knowledge is largely based

on the Level 4 Diploma exams. So what is available? Well there are a range of materials available that

will to help you to prepare for the exam.

The CII exam package

The CII offer the following exam options:

Exam only;

Enrolment (exam entry and some support

material);

Enrolment plus (exam entry and a wide range of

support material); and/or

Separate study materials that you can purchase

as you wish (particularly if you only purchase the

exam only option).

To enrol and for full details, go to the AF1 page on the CII

website here.

If you select the CII’s ‘enrolment package’, this includes

your exam entry and the following AF1 exam support

material:

eBooks for R03 (Taxation), R05 (Financial

protection) and J02 (Trusts). These are provided

in an electronic Google book which is NOT a

printable format.

An AF1 case study workbook.

A range of past exam guides (completing two or

more of these is essential for AF1); and

Access to RevisionMate – their online learning

support. This provides a number of features

which include multiple-choice questions and

practice tests to practice your knowledge.

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The CII enrolment package in more detail

Diploma study texts - The CII will provide you with the Diploma level study texts for R03, J02

and R05 as part of your enrolment for AF1. The technical content of AF1 is largely based on

R03 but also remember that the syllabus for AF1 will be wider than any one Diploma subject.

For many people, just use these study texts as a reference source. Dip into them when you

come across something when completing a practice question that you don’t understand. If

you aren’t sure how discretionary trusts are taxed (and this would be really useful for an AF1

exam), check the study text or Google it and you are sure to find the answer.

Past exam papers and practice tests. As we saw in the previous section, you will automatically

get a range of past papers when you enrol for your exam.

You should ensure you spend time studying these. You will maximise the benefit of these if

you attempt at least two (and preferably more) past papers as a ‘mock exam’, i.e. write your

answers down before checking them against the model answers in the examination guide.

This is time consuming and can seem a little daunting. It is also intensely frustrating when your

answers don’t quite match those shown - but it is only by understanding where you are going

wrong so that you can adapt your answers to the style and content required to gain the marks

needed to pass the exam. This is something you cannot learn by simply reading through

examination guides or study texts.

Audio MP3 material

There is also MP3 audio revision material available from our website, which includes over 6 hours of

material. All of it could potentially be covered in the exam and there is also a module which focuses

on the exam technique you will need for AF1.

If you spend time travelling, running or in the gym, these are an ideal way of making the best use of

your time and reminding yourself of the areas you need to know (and have perhaps forgotten since

you last sat the Diploma level exam). These help you to learn on the go.

For details of our AF1 audio material, click here

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Training courses

There are a limited range of third-party training providers who provide these either face to face, or

online. Some local CII institutes also provide this type of training. Either way, if face-to-face training

works for you, book your place early. Covid-19 obviously has impacted the availability of this type of

training.

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C. A study plan People will need to approach AF1 in a way that best suits their own learning style, and their

circumstances. You will already have sat more than a few exams so you will probably already know

what you need to do to prepare yourself for an exam – whether it is a schedule of ongoing planned

activities, or a last minute cram!

Here is a possible study plan for tackling AF1:

There are also useful revision tools such as Brainscape. This free website enables you to design electronic flash cards to aid your revision. Go to the following website for more information: www.brainscape.com NB. You are strongly advised to start your preparation as early as possible. The AF exams are becoming less predictable which means that your only ‘safe’ option is to be well prepared. Few people go into these exams over prepared!

6 weeks +

before the exam

Read through at least two practice tests early on in your preparation

to understand the exam

Choose your study material, book, MP3 etc and study widely (with

particular emphasis on those areas examined frequently)

Make notes or mindmaps to help retain the knowledge. Attend a

course if required

2-6 weeks

before exam

Complete a further 2 practice tests (at least) under exam conditions

Read the examiner's comments -understand the typical mistakes

Foucus on technique: how you answer the questions

Use the CII study texts as a reference source. In addition, focus on areas :

1. you are least comfortable with, and

2. that tend to be popular with the examiners

1 week

before exam

Continue to focus on areas you are uncomfortable with and which also

feature in past exams

Refine your technique. Complete a futher past exam paper under exam

conditions and mark

Address any remaining technical areas you aren't familiar with

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What does effective study look like?

As exam specialists, we write quite extensively about effective study techniques and how to develop

the all important exam technique. It’s not all about how much you do – work smarter not harder.

Here are some links you might find useful:

How to pass your AF exam first time. Click here

The most important revision tip ever. Click here

See our blogs on the website for other articles. Click here

CII AF1 exam and how to pass it. Click here

In conclusion......

To pass any exam, there are effectively only two elements:

1. What you know, and

2. Being able to apply this knowledge in a way that scores marks in the exam.

Do use the time available to you between now and the exam to

ensure your knowledge is tip-top. Having an extensive knowledge of

a subject is never a bad thing in an exam. The breadth of the AF1

syllabus also means that few people will cover all aspects as part of

their day job.

However if you do not answer the question the examiner set – a very

common problem at AF level - you may still fail. Because of this, we

also strongly recommend practicing under exam conditions at least

2 past CII practice papers which will allow you to test your ability to

apply your knowledge and score marks. The AF1 exam has also,

historically, focussed on similar types of core question so practising CGT, income and IHT calculations

from past papers will almost certainly help you in the exam you sit.

Finally, remember that the CII recommend around 150 hours of study and preparation. Like all the

Advanced Diploma exams, AF1 should be treated with respect.

150 hours of study equates to around 25 hours per week over a six week period.

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D. Question Types

We will now look at the different types of questions. This is pretty straightforward with AF1. Questions

will typically include a verb and the vast majority of these will be:

Explain or describe,

Calculate, or

List or identify.

There is no rocket science involved in this yet almost all people who sit AF1 will leave the examination

room having not picked up marks on areas where they knew the subject area. Some basic technique

can make the difference.

Explain and describe

Always look at the verb and the number of marks available. Explain and describe questions could be

worth two marks so if there are 10 marks for the question, look for a minimum of five bullet points

(put down at least 6 if you can and time allows).

Many candidates have historically found this type of question

harder than a calculation question. Look at the verb and

apply your answers to the case study. If there is information

in the case study, you are likely to be expected to use it in

some way.

Finally, don’t assume something is too simple to get marks.

Work on the basis that the examiners know nothing – they

cannot award marks if it isn’t written down.

List or identify

These are usually only worth one mark per answer. You will typically get this for putting the required

answer down – no amplification or explanation is usually required. Again, if there are 7 marks

available, look to write at least 7 or 8 answers to maximise your chances of getting full marks. This

type of question is less common in the AF exams because the focus of the exam is more on application

and analysis, not the recall of facts. But they do occur from time to time, e.g. ‘Identify the additional

information you would require before...’

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Calculate

This requires you to undertake a calculation and inevitably there will be at least one (and probably

three) calculations for income tax, CGT and/or IHT in a typical AF1 paper.

Unless otherwise stated, any calculation should be to two decimal places.

Although people generally like these, they don’t always score high marks because of a failure to set

these out in an acceptable and clear format. The examiners award marks for demonstrating the

correct process. This means you can get most of the marks even if you get the wrong answer. You

must ‘show you know’.

In AF1, also expect ‘some additional spice’. You will find, for example, reliefs are often part of CGT and

IHT calculations to add some complexity.

.

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E. Exam technique

We've touched upon technique a little in this section,

particularly about keeping an eye out for the use of verbs

in a question. There are a few more things to be aware of

which will help you in the exam and we shall look at a

further 10 golden rules of exam technique.

1. Watch for the verb and the number of marks. We are frequently asked how much depth the

examiners want in the answer and the best way to judge this is to look at the verb and the

number of marks available. If the verb is ‘list’ and there are seven marks, the examiner is

probably looking for seven bullet points. Put down a couple more bullet points than necessary

if you can to maximise your chances of getting full marks.

2. Use bullet points. This makes it easier for the examiner to pick out the points you are making.

You also probably won’t be used to writing for three hours solid either so using bullet points

enables you to maximize the content using the minimum number of words.

3. If in doubt, put it down. The CII exams work on a positive marking scheme which awards

marks for the right answers and does not take marks away for incorrect answers.

4. With calculations, show your working out. Even if you get the calculation wrong, you will

often pick up marks for demonstrating the correct process. So make sure you show each step

of your calculation. You can expect several calculations in AF1.

5. Assume the examiner is an idiot! We’re not wishing to be offensive or personal to examiners

but people in the exam often do not state the obvious because they feel it is too basic. The

examiners can only award marks for what is written down - so make sure you do so, even if it

feels a little ‘Janet and John’.

6. Put down more answers than there are marks for. If the question is for 5 marks, try and put

down 7. You are never going to be able to second-guess precisely the answer the examiner is

looking for so it makes no sense to just limit your answers to the number you think you need.

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7. Keep an eye on the time. The AF1 exam will be 160 marks and you have three hours (or 180

minutes) so, in effect, you have a little over a minute per mark. Although this sounds very

simple and basic, people frequently do not leave enough time to answer all the questions as

fully as they would like to and/or do not fully complete the exam paper. You are likely to need

the full three hours in the exam.

8. Answer the questions in any order. For most people, the exam will consist of some questions

you have prepared for (and look forward to answering), and some questions you feel less

confident with. Answer the questions you feel most comfortable with first.

9. It isn't an English lesson. Don’t worry about your grammar or writing style as long as your

content is comprehensible. If you have time it is always worth re-reading your answer; this

will allow you to correct errors and spelling mistakes and to make sure that your answer makes

sense.

10. Don’t be generic: apply your answers to the client's circumstances. This is a major reason for

people failing this exam – people can write technically correct answers but if they don’t relate

this to the client specific circumstances, then the answer is unlikely to score highly.

Tip: For on-line exam sittings, watch the CII video before you sit the exam if this is your first time. For on-line exam sittings, watch the CII video before you sit the exam if this is your first time.

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F. AF1 – past performance…..

There are, of course, no guarantees. An analysis of past exam

papers shows that it is almost inevitable that you will be

examined in the following areas:

Income tax calculations

CGT calculations

IHT calculations

Areas frequently tested historically:

Trust taxation: income tax

Trust taxation: CGT

Trust taxation: IHT

Investment taxation, e.g. investment bonds, EIS & VCTs

Use of trusts

Bankruptcy

Powers of attorney

Other tested areas:

Role of trustees

Wills / intestacy

Tax and self-assessment

National insurance contributions

Sensibly, your preparation would refresh and build your knowledge in these areas.

We hope this provides you with valuable food for thought to help you prepare for the AF1 exam. We

wish you all the best for the exam.

info@pstgroup.co.uk

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