Start the Tax Year with a Spring Clean with The SIT PEP Transfer Facility

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The start of a new tax year may be an ideal time for investors to think about a spring clean of their personal financial affairs and to take a fresh look at their investment portfolio.

The Scottish Investment Trust PLC (SIT) is one of the largest investment trusts within the global growth category. Its wholly-owned subsidiary, SIT Savings Ltd, is offering investors the opportunity to access SIT’s diversified fund portfolio tax-efficiently with The SIT PEP transfer facility. As a global growth trust, SIT’s worldwide investment spreads risk over a wide range of regions, companies and market sectors while allowing an extensive search for investment opportunity.

There can be certain benefits in spring cleaning your PEP portfolio:

Moving from a PEP with a percentage annual charge to one with a flat rate annual charge could impact positively where an investor has built up a sizeable fund within his/her PEP

Transferring a poorly performing PEP could enhance returns over the long term – although investors must remember that past performance is no guide to the future and the cost implications of transfer should be weighed against any potential performance gain

Investors’ expectations of acceptable risk can be re-aligned as market conditions or personal circumstances change

Transferring a single company PEP to a general PEP in a fund investing worldwide ensures risk and return are not solely tied to the performance of one company

Consolidating PEP investments with fewer managers can also reduce overall costs

A more concentrated PEP portfolio with fewer managers may reduce administrative and paperwork burdens

SIT’s PEP transfer facility has no initial or transfer-in charges* and a very competitive flat rate annual management charge of just £30 + VAT. This flat charge is regardless of how many SIT PEPs are held or how much the PEP investment grows. The table below shows what investors would pay if they had a SIT PEP with its flat annual charge compared to a modest annual charge levied as a percentage of the value of the PEP. A number of PEPs levy percentage rather than fixed rate charges.

SIT’s flat rate annual charge of £30 + VAT compared to an annual PEP charge of 0.5% + VAT

PEP Value (£)

6,000    

15,000    

30,000

50,000

0.5% PEP Annual Charge (£)

30

75

150

250

SIT’s PEP Annual Charge (£)

30

30

30

30

NB: VAT is applicable to the charges shown in this example

The SIT PEP offers investors an attractive combination of low charges and solid long-term performance. The SIT PEP also has the following advantages:

Free PEP Transfer-in Facility – There is no transfer-in charge on The SIT PEP*.

Easy Administration – Investors receive a twice-yearly report on their PEP’s performance.

Flat Rate Annual Charge – this means that if your PEP grows in value your charges do not.

Online facility – investors can view details of their PEP online

Easy Application Process – SIT offers several methods of application. Investors can apply by downloading the application form available on the SIT website or they can request an information pack by contacting SIT on 0800 42 44 22 or by asking their IFA.

Sherry Ann Sweeting, marketing manager, SIT Savings Ltd, commented:

“As investors cannot open a new PEP, these investments are often overlooked. There are many benefits to spring-cleaning a PEP portfolio as it can enable investors to bring their portfolio in line with the current market conditions and their own circumstances – which may have changed since their PEPs were first set up. For example, a greater need for income rather than purely capital growth perhaps due to retirement, or an increased or decreased tolerance to risk. It is also important investors check the charges levied on their PEP. A low percentage annual charge on a small investment can seem a modest amount but as a PEP grows in size, such charges can mount up and impact negatively on returns.“

  • Please note, whilst SIT makes no charge for transfers in, the previous PEP manager may impose a charge for administering the transfer out. External expenses (government stamp duty of 0.5% and dealing spread which has averaged 0.7% over the last 3 years) also apply.

Editors’ Notes:

The Scottish Investment Trust PLC

The Scottish Investment Trust PLC (SIT) is a global growth investment trust which, unlike the majority of investment trusts, is independent and self-managed. Established in 1887, SIT invests in companies traded on the world’s major stockmarkets. SIT is managed with the objective of providing investors, over the longer term, with above average returns through a diversified portfolio of international equities and achieving dividend growth ahead of UK inflation.

SIT’s wholly-owned subsidiary, SIT Savings Ltd, offers an investment trust savings scheme - STOCKPLAN; tax efficient products – The SIT ISA and The SIT PEP Transfer; and an investing for children scheme - STOCKPLAN: A Flying Start.

Further information can be found at:

The Scottish Investment Trust PLC

Telephone: 0131 225 7781

Email: heather @ sit.co.uk

Website: The Scottish Investment Trust

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