What is the CISI Investment, Risk and Taxation exam?

Investment, Risk and Taxation is a Level 4 core unit of the CISI Investment Advice Diploma and is also used in the Certificate in Paraplanning pathway. It links investments, risk, UK taxation, portfolio construction and the advice process.

How many questions are in the CISI IRT exam?

The current Version 16 assessment has 80 scored multiple-choice questions in 120 minutes. A computer-based test may include up to 10% extra unscored trial questions with proportionate extra time.

Which IRT topic has the most questions?

Taxation of Investors and Investments is the largest element with 16 questions. Asset Classes, Investment Products and the Process of Giving Investment Advice each carry 13 questions.

How many hours should I study for CISI Investment, Risk and Taxation?

The official learning material estimates approximately 140 study hours. Candidates should adapt the allocation after a diagnostic while retaining full syllabus coverage and timed mixed practice.

Do I need to check CISI Candidate Updates for IRT?

Yes. The Version 16 Candidate Update posted on 15 June 2026 includes formula, tax, options, product and portfolio corrections and extends the exam period to 30 November 2026.

A qualifying discretionary trust has exactly £500 total income and its full de minimis limit. Under HMRC's rule, what follows?

The income is within the inclusive £500 exemption

Only income above £500 is taxable at the trust rates

The full £500 must be taxed because equality fails the limit

The trustees deduct £500 from income in every year even when the limit is exceeded

Why can a charity's investment income be exempt without all its receipts being exempt from every tax?

Exemptions depend on the tax, activity and application for charitable purposes

All investment and trading income is exempt regardless of its use

Charitable status automatically makes every supply zero-rated for VAT

Income-tax exemption necessarily means all property transaction taxes are also exempt

A self-employed person's 2025/26 profits meet the £6,845 small-profits threshold. What normally happens to Class 2 benefit entitlement?

Class 2 is treated as paid under the applicable rules

Class 2 is payable in cash each week regardless of the deemed-paid rule

Class 4 is replaced by voluntary Class 3 for all profits above the threshold

Class 2 benefit credit begins only once profits exceed the Class 4 upper limit

A qualifying spouse transfer is made on a no-gain/no-loss basis. Which statement is correct?

The embedded gain is normally deferred through the recipient's base cost

The asset's entire future gain becomes permanently exempt

The transferee always gets market value as tax cost

The transfer necessarily uses the donor's annual exemption

What does IHT taper relief normally reduce on a chargeable failed PET?

The original gift value before testing the nil-rate band

The remaining ordinary nil-rate band available to the death estate

The value of every gift made within the preceding seven years

Under England and Wales intestacy, who receives the statutory spouse entitlement automatically?

A surviving legal spouse or civil partner meeting the statutory conditions

An unmarried partner who shared the deceased’s household

A former spouse after a completed divorce

An adult child instead of a surviving spouse whenever the estate contains property

Which transfer is normally a chargeable lifetime transfer rather than a PET?

A gift into an ordinary relevant-property discretionary trust

An outright qualifying gift to an adult child

A qualifying bare-trust gift for a beneficiary

An outright cash gift to a friend with no retained benefit

What is a consequence of claiming the new four-year FIG relief for an eligible year?

Loss of the personal allowance and CGT annual exempt amount for that claim year

Only the amount of relief actually used reduces the personal allowance

Personal allowance remains intact but the CGT exemption is doubled

The relief applies automatically without a claim once eligibility exists

What is the usual purpose of foreign-tax credit relief?

To relieve overlapping tax on the same income within applicable limits

To refund any foreign tax even where it exceeds the corresponding UK tax

To remove the need to report gross foreign income in every case

To make treaty residence depend solely on the payer’s location

Which information is most relevant to claiming treaty withholding relief?

Residence, beneficial ownership, income type and valid documentation

The account’s dealing currency and the date of its last purchase

The issuer’s listing venue alone, regardless of the recipient’s residence

The intermediary’s brand name instead of beneficial-owner evidence

From 6 April 2025, what generally determines long-term-resident IHT scope for overseas assets?

UK residence history, broadly ten of the previous twenty tax years

Domicile alone, with no residence-history test for current transfers

The place where the overseas investment account was opened

The number of years the specific asset has been owned, regardless of residence

What dated FSCS deposit limits should be distinguished?

£85,000 per eligible person per authorised firm through 30 November 2025; £120,000 from 1 December 2025. Qualifying temporary high balances can receive up to £1.4 million for six months under the current rules.

When does the updated £1.50 PTM levy apply?

On qualifying purchase or sale consideration exceeding £10,000. Exactly £10,000 is outside that trigger.

How do basis points convert to percentage points?

100 basis points = 1 percentage point; 1 basis point = 0.01 percentage points = 0.0001 as a decimal rate.

What is the 2025/26 personal allowance and taper?

£12,570; reduce £1 for each £2 of adjusted net income above £100,000, leaving no standard allowance at £125,140.

What 2025/26 non-savings income-tax rates apply in England, Wales and Northern Ireland?

20%, 40% and 45%. The basic taxable band is £37,700; Scottish non-savings rates and bands differ.

What are the savings allowances in the dated tax examples?

PSA: £1,000 basic rate, £500 higher rate, zero additional rate. Starting-rate savings band up to £5,000, reduced by non-savings income above the personal allowance.

How do 2025/26 and 2026/27 dividend rates differ?

Allowance £500 in both years. Rates in 2025/26: 8.75%, 33.75%, 39.35%; from 6 April 2026: 10.75%, 35.75%, 39.35%. Keep the question's tax year.

What is the 2025/26 Marriage Allowance transfer and maximum saving?

Eligible transfer £1,260; maximum basic-rate reduction £252. It differs from Married Couple's Allowance.

How does the trust £500 income rule work?

For qualifying trusts, up to £500 inclusive is exempt; above the applicable limit the whole amount is taxable. It is not a deduction, can be reduced across multiple trusts and is not the bare-trust rule.

CISI Investment, Risk & Taxation Exam Guide (2026)

Table of Contents

• Current CISI IRT exam format
• Version 16 syllabus weighting
• Build one connected decision chain
- Asset and economic evidence
- Risk and tax consequences
- Product and portfolio fit
- Advice, implementation and review
• What the June 2026 Candidate Update changes
• A 140-hour CISI IRT study plan
• Separate formula recall from formula selection
• Use mock results as diagnostic evidence

CISI Investment, Risk and Taxation

Explore the study tools and practical exam preparation built for this course.

CISI Investment, Risk & Taxation: Syllabus and Study Plan

The CISI Investment, Risk and Taxation exam is broad because it tests an entire advice chain. You move from asset characteristics and economic analysis to risk measurement, tax treatment, products, portfolio construction, client suitability and performance review. The effective preparation method is therefore not “finish tax, then forget it.” It is to keep applying the same client facts across all eight elements.

For the current sitting window, candidates should prepare from Version 16 and check the official Candidate Update before relying on worked examples or older notes.

Current CISI IRT exam format

Item	Current detail
Level	CISI Level 4
Qualification role	Core Investment Advice Diploma unit; also used for the Certificate in Paraplanning
Current syllabus	Version 16
Current exam period	Extended to 30 November 2026
Assessment	80 scored multiple-choice questions
Standard time	120 minutes
Recommended study time	Approximately 140 hours

The standard paper allows an average of 90 seconds per scored question. Calculation and scenario questions may need more than that, so direct-recall questions must be handled efficiently. Computer-based tests can also contain up to 10% additional unscored trial questions with proportionate extra time.

Version 16 syllabus weighting

Official element	Questions	Weight
Asset Classes	13	16.25%
Fundamental Analysis	6	7.5%
Principles of Investment Risk and Return	9	11.25%
Taxation of Investors and Investments	16	20%
Investment Products	13	16.25%
Portfolio Construction and Planning	5	6.25%
The Process of Giving Investment Advice	13	16.25%
Portfolio Performance and Review	5	6.25%
Total	80	100%

Taxation is the largest single element, but the three 13-question areas together account for nearly half of the scored paper. A tax-only revision plan cannot compensate for weak asset, product or suitability decisions.

Build one connected decision chain

Asset and economic evidence

Start by learning what drives the return, liquidity, credit exposure, volatility and valuation of each asset class. Then connect company accounts, economic indicators, monetary policy and fiscal policy to the way those assets may behave.

Risk and tax consequences

For every product or strategy, ask two separate questions: what risk does it introduce or reduce, and what tax consequence could change the client outcome? Tax efficiency is a constraint within suitable advice, not a substitute for suitability.

Product and portfolio fit

Move from isolated product features to combinations. Record which client need a product can address, its limitations, access rules, charges, liquidity, tax treatment and interaction with other holdings. Then place it within strategic allocation, diversification and the client’s capacity for loss.

Advice, implementation and review

Complete the chain by identifying the client objective, gathering the relevant evidence, comparing reasonable solutions, explaining the recommendation, implementing it and defining what would trigger a review.

Interactive preview

Free CISI Investment, Risk and Taxation Practice Questions & Exam Preview

Try 15 CISI Investment, Risk and Taxation practice questions from Chapter 4: Taxation of Investors and Investments

Practice CISI Investment, Risk and Taxation exam questions with answers and explanations. The full course includes 5 mock exams and complete syllabus coverage.

Exam Preview

Chapter 4: Taxation of Investors and Investments

Question 1 of 15

For 2025/26, how is the standard personal allowance reduced above £100,000 adjusted net income?

1 / 15

Flashcards

Card 1 of 10Number Recall

Question

What is the official scored-paper pass boundary?

Tap to reveal answer

Focus Learn

Key Examinable Areas10

1.1.1: Choosing a deposit
1.1.2: Cash is not free of risk
1.1.3: Money-market fund structures
1.1.4: Peer-to-peer lending
1.1.5: Selecting a cash holding
1.2.1: Reading foreign-exchange markets
1.3.1: Who issues bonds?
1.3.2: Bond return and duration
1.3.3: Bond structures
1.3.4: Bond dealing and settlement

Common Pitfalls to Avoid3

Exam Traps3

Key Numbers10

What is the official scored-paper pass boundary? 56 correct answers out of 80 (70%); the standard examination time is 120 minutes. Trial questions can add proportionate time.
What dated FSCS deposit limits should be distinguished? £85,000 per eligible person per authorised firm through 30 November 2025; £120,000 from 1 December 2025. Qualifying temporary high balances can receive up to £1.4 million for six months under the current rules.
When does the updated £1.50 PTM levy apply? On qualifying purchase or sale consideration exceeding £10,000. Exactly £10,000 is outside that trigger.
How do basis points convert to percentage points? 100 basis points = 1 percentage point; 1 basis point = 0.01 percentage points = 0.0001 as a decimal rate.
Compound interest and AER: FV = P(1 + j/m)^(mt); AER = (1 + j/m)^m − 1. P = £10,000 principal; j = 6% nominal annual rate; m = 2 half-yearly periods; t = 2 years. Reinvest all interest; no fees or tax.
Net interest and linked accounts: Net interest = gross interest × (1 − tax rate); combined yield = total net interest / total required balance. £8,000 earns 5%; a mandatory linked £2,000 balance earns 0%. All interest is taxable at a supplied 20% rate; allowances already used.
FX quote direction and spread: Quote USD per GBP: buying GBP costs USD ÷ dealer offer; selling GBP receives GBP × dealer bid. A dealer quotes GBP/USD 1.2500–1.2600. A customer first sells $12,600 to buy pounds, then immediately sells those pounds. No extra fees.
Fixed coupon and floating-rate margin: Coupon = nominal × annual rate × period fraction; floating rate = reference rate + margin. Nominal £20,000; reference 4%; margin 75 basis points; half-year coupon. Rate is already reset for this period. For the net illustration, supplied tax rate is 20% and allowances are used.
Effective conversion price: Effective price per share = bond purchase cost / shares received on conversion. A convertible costs £1,080 and its terms provide 40 shares on conversion. Ignore accrued interest and dealing charges.
Running and approximate redemption yields: Running yield = annual coupon / price; workbook approximate redemption yield = coupon/price + (redemption − price)/(price × years). £100 nominal bond; annual coupon £5; purchase £96; redemption £100 in four years. This is the workbook approximation, not exact IRR.

Chapter 1: Asset Classes

Start with the economic claim you own: a deposit, debt claim, residual equity interest, physical asset or contractual exposure. Compare the source of income, potential capital change, liquidity, counterparty and market risks. An asset's name alone does not establish protection or suitability. The sections below distinguish the major asset classes and connect valuation methods to their assumptions.

Choosing a deposit

A current account serves payments; instant-access savings prioritise availability. A notice account requires advance notice or a stated penalty, while a fixed-term deposit commits money for an agreed term under its rate terms. Money-market deposits have specified dealing sizes and maturity terms. NS&I products have their own access, eligibility and tax rules and Treasury b…

Unlock all Focus Learn

Open every chapter’s key areas, pitfalls, exam traps and key numbers.

What the June 2026 Candidate Update changes

The official Version 16 update is not a minor formatting note. It includes corrections to bond-yield examples, compound-interest and future-value equations, geometric mean, time-weighted return, Sortino ratio, Markowitz portfolio-risk equations, tax explanations, option examples, pension contributions, top slicing, EIS treatment, structured-product scenarios and asset-allocation workings.

Create a short correction register with three columns:

Source location	Corrected rule or working	Practice completed?
Chapter and page	State the correction in your own words	Add a date after a fresh re-test

Do not merely highlight the update. Rework each affected calculation or decision without the answer visible. The official update also extends the Version 16 exam period from 30 October to 30 November 2026.

A 140-hour CISI IRT study plan

Study block	Hours	Main output
Asset Classes	21	Asset comparison grid and risk drivers
Fundamental Analysis	9	Accounts-to-valuation and macro impact maps
Risk and Return	15	Formula selection drills and interpretation notes
Taxation	26	Tax decision tables and dated volatile-facts sheet
Investment Products	21	Product suitability matrix
Portfolio Construction	9	Allocation and diversification cases
Giving Investment Advice	21	Client fact-pattern decision practice
Performance and Review	8	Measure-selection and review-trigger exercises
Mixed timed practice	10	Fresh mixed sets, full mocks and error repair
Total	140

The table is a starting allocation. After each mixed set, move time toward demonstrated weaknesses. Preserve at least one short retrieval session for every element each week so early topics remain available under exam conditions.

Separate formula recall from formula selection

Calculation errors often begin before any buttons are pressed. Use this five-step routine:

identify what the question asks you to measure;
write the relevant values with their units and timing;
choose the method and state why it fits;
estimate the direction or plausible range; and
calculate, then interpret the result in the client or portfolio context.

Practise using the onscreen-calculator format because handheld calculators are not permitted in CISI computer-based exam venues. A correct formula with badly timed cash flows is still a wrong answer.

Use mock results as diagnostic evidence

After a timed paper, review accuracy by syllabus element and by error type. Mark answers that were correct but uncertain; they represent hidden risk. Then distinguish:

missing knowledge;
an outdated figure or uncorrected source;
wrong formula selection;
arithmetic or input error;
weak suitability judgement; and
time pressure or stem-reading error.

The CISI Investment Advice Diploma page confirms that IRT sits alongside UK Regulation and Professional Integrity plus one technical unit. If you are building that wider route, also see our guide to CISI UK Regulation and Professional Integrity. Check the official CISI Candidate Update page shortly before your sitting.

CISI Investment, Risk & Taxation: Syllabus and Study Plan