PEPIntroducing the PEP, or Personal Equity Plan The PEP or Stock Savings Plan is a “fiscal envelope” that lets you set up a tax-free stock or UCITS portfolio. As long as no withdrawal is made for five years, the income from the investments made will be permanently exempt from income and capital gains taxes. Opening and feeding the PEP For the length of its life, the PEP can be fed so long as no withdrawals are made. A request for withdrawal during the first eight years of the life of the PEP leads to its closure. After eight years, the same request merely blocks the possibility of paying into it. The deposit ceiling is limited to €132,000 since January 1, 2003. So for an PEP opened before that date and made up to 120,000 euros (former ceiling), today it is possible to make complementary deposits to reach the new ceiling of €132,000. Transferring a PEP It is quite possible to transfer your PEP from one bank to another. This has no impact on the PEP’s fiscal data: total deposits, fiscal purchase prices, dividends and dividend tax credits will be fully recovered when the transfer is made. The transfer process, however, is rather long: you need to expect two to three weeks. Investment possibilities From the creation of the PEP, investment supports were limited to French stocks and to collective management products. To be eligible, the UTICs had to hold at least 60% French shares for unit trust companies or at least 75% for investment funds. Now the PEP has caught up with Europe: savers can invest in the European markets. Since January 1, 2003, funds consisting of a minimum of 75% European securities will also be eligible for the PEP. Since January 1, 2002, very dynamic investments promoting innovation, like venture capital mutual funds (FCPR) and innovation capital mutual funds (PCPI) are also eligible for the PEP. This opening up to Europe and to very dynamic investments now provides access to a broad selection of investments and makes it possible to envision greater diversification of the portfolio. |
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