A FI is entitled to give Instrument instruction on both the PPL and CPL courses without having the "No Applied Instrument" limitation removed from the rating. Remember, this is not a JAA limitation but an outdated UK limitation that wasn't removed due to "software" limitations in 1999. Put simply, you don't need to have completed the IRI course to exercise that privilege. To fly through cloud you do need an IR, an IMC rating or hold a UK professional licence with inclusive privileges.
Whilst there is no clear definition of "Applied IF" it is considered to mean teaching Instrument Approaches not basic IF.
With regard to legality, the FI is perfectly legal doing what you describe. Teaching aerobatics is a slightly different situation, when the licence actually contains a limitation prohibiting such instruction. However; as you may have seen in previous threads you only need a rating to teach for a rating and there isn't one for aeros yet. Trainingcom is really trying to say, if you teach aerobatics make sure you are qualified to do so.
One interesting anomaly is that to teach IF at night, a FI must also hold a night instructional qualification whereas, a stand alone IRI is not restricted to teaching IF by day!
Last edited by Whopity; 19th Jul 2011 at 06:44.