Ask the experts: Transfering from a PEP
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If you transfer an equity holding from your PEP into your daughter's name (removing it from the PEP as it would be transferred into certificate form) would it be free from Capital Gains Tax?
AG, East London
PEPs and ISAs are linked to an individual's National Insurance number to ensure that the favourable tax allowances are not breached. They can enjoy a virtually tax free status until the investor wishes to withdraw either part or all of the funds.
It should be noted that once a withdrawal has been made, the funds cannot be reinvested back into the PEP/ISA at a later date.
Due to the nature of PEPs and ISAs, unit trust monies under these plans cannot be transferred to another individual. However, depending on the ISA/PEP provider, it may be possible to transfer shareholdings to another outside the PEP/ISA shelter.
Should the proceeds be unit-trust-only monies, the recipient would receive cash from the sale and then could reinvest into the same funds in the usual way.
Surrenders and transfers made from PEPs and ISAs are not subject to capital gains or income tax.
Frances Goldspink, Knowlden Titlow
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