Personal Equity Plans (PEPs)

Personal Equity Plans - as of 6 April 1999 - were closed for business. You cannot now put any more money into a plan. However, investments made prior to that date within PEPs continue to benefit from the tax shelter. You may also, of course, invest further funds in an Individual Savings Account ( ISA ) which replaced PEPs.

Created in 1987, by the time of their abolition the Inland Revenue had permitted each taxpayer to put £6000 into a General PEP and an additional £3000 per annum in a single company PEP.

Apart from investing directly in shares, many people used PEPs to invest in unit trusts and investment trusts. PEPs were also able to invest in corporate bonds, convertibles and preference shares in UK and EU companies.

If you've invested in unit trusts or investment trusts via a PEP, tracking the performance of your investment manager will be important. Remember, you still have the option of switching your funds to another manager while retaining the tax breaks on offer if you are dissatisfied with current investment performance.

Last Updated: June 2007 © Moneyextra.com

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