The Personal Equity Plan (Amendment) Regulations 2001

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Personal Equity Plan Regulations 1989 (S.I. 1989/469) (“the principal Regulations”). The principal effects of these Regulations are (1) to align the rules for investments which may be made under plans (“qualifying investments for plans”) with the rules for Individual Savings Accounts (“ISAs”), (2) to remove the distinctions between general plans and single company plans, (3) to allow parts of plans to be transferred between plan managers, and (4) to further align the rules governing the administration of plans with those for ISAs.

Regulation 1 provides for citation, and commencement and regulation 2 contains definitions. Regulation 3 amends definitions in the principal Regulations.

Regulations 4 and 5 contain the amendments to regulations 4 and 4A of the principal Regulations, removing the distinctions between general plans and single company plans.

Regulation 6 makes technical amendments to regulation 5 of the principal Regulations, amending the rules relating to the price at which transactions in plan investments must be conducted and the investment of cash held in a plan.

Regulation 7 substitutes, for regulations 6 to 6B of the principal Regulations, a new regulation 6 setting out investments which may be made under plans. This generally follows the equivalent rule for stocks and shares ISAs but also allows the retention of any permitted PEP investments already held when these Regulations come into force.

Regulation 8 makes a technical amendment to regulation 7 of the principal Regulations, governing who is a qualifying individual who may invest in a plan.

Regulations 9 and 10 amend regulations 14 and 15 of the principal Regulations, relating to declarations which must be given to the Inland Revenue and to investors by a plan manager who intends to cease acting, or who ceases to qualify as such.

Regulation 11 amends regulation 16 of the principal Regulations (rules relating to transfers of plans) to allow parts of plans to be transferred between plan managers.

Regulation 12 amends regulation 24A of the principal Regulations (provisions for plan manager’s annual return of information).

Regulation 13 makes technical amendments to regulation 27 of the principal Regulations (Capital gains tax – adaptation of enactments).

Regulation 14 preserves the right to treat a plan as void, or any other penalty or liability, in relation to events prior to the coming into force of these Regulations.