§ Mrs. Roeasked the Chancellor of the Exchequer if he will make a further statement about the scheme for personal equity plans announced in his Budget speech.
§ Mr. LawsonIn my Budget speech I announced a scheme, known as the persoral equity plan, under which investors will be able to invest up to £2,400 a year in shares. They will not pay capital gains tax on disposals nor income tax on reinvested dividends, provided they remain in the scheme for a qualifying period of between 12 and 24 months. Once the qualifying period has ended, investments may be realised without loss of tax relief.
The Inland Revenue has today published a document, as a basis for consultation, called "Personal Equity Plans: A Prospectus for Potential Plan Managers". It sets out the broad shape of the scheme and is designed for people interested in becoming plan managers. A copy of the prospectus has been deposited in the House of Commons Library.
The prospectus sets out the main criteria for the personal equity plan scheme:
- —Qualifying investment will be confined to ordinary shares in United Kingdom-incorporated companies quoted on the stock exchange.
- —There must be a clear link between the investor and his or her shares — so that investors may attend company AGMs, exercise voting rights, receive company information and benefit from shareholders' privileges.
- — Dividends on investment must be ascribed to individual investors.
- —Limits on holding assets in liquid form in plans.
- —Charges by plan managers must be transparent.
The prospectus explains who can invest in the plans, how investments will be made, and what investments qualify. Special arrangements will be made to allow investment, up to a lower limit, in unit trusts and investment trusts.