Schemes which give UK resident investors the opportunity of investing in the stock market without paying tax. Shares held in a PEP are held on trust for investors, who retain the beneficial ownership of the shares. While they are held in the PEP no income tax is payable on dividends (www.practicallaw.com/A34897), and no capital gains tax (www.practicallaw.com/A34601) on disposals.
PEPS were replaced by individual savings accounts (www.practicallaw.com/A35385) (ISAs) from 6 April 1999 but PEPs in existence at that date can continue.
For further information, see the HM Revenue & Customs (www.practicallaw.com/6-200-6399) website (www.practicallaw.com/4-106-3216)