2.2.8 Personal Equity Plans (PEPS)
-
Since 6 April 1999 no new investments have been allowed to be placed
into PEPs following the introduction of ISAs (see 2.2.10). However,
existing PEP holders are allowed to retain their investments and
continue to enjoy the taxfree status. They may also take out ISAs.
-
As there was no time limit imposed on length of investment, existing
PEP holders are free to encash their PEP at anytime.
-
It is not permitted to transfer PEP holdings into an ISA. (There
would be no advantage anyway).
-
PEPs were first introduced in 1987 and provided a medium for those
who wished to invest in equities and to do so within a tax free
environment. Naturally there were limits as to how much could be
invested in this way (£9,000 in 1998/1999) but they did prove
extremely popular - not just to "experienced" investors
but also to "the man in the street". PEPs were part of
the then Government's way of extending share ownership and privatisation
programme. Monies could be invested directly into equities (via
stockbrokers) or more commonly through unit trusts and other collective
investment schemes.
|