Inland Revenue plans to outlaw Pep bundling could see some of the UK&#39s bigg est fund managers footing bills running into millions of pounds.

The announcement on bundling in last week&#39s pre-Budget report will give investors the right to request a transfer of Pep funds from individual tax years.

Many fund managers force Pep holders to transfer all their holdings at the same time as they are unable to separate investments made in different tax years.

Several fund managers will not be able to manage the changes under their current admin platforms.

In particular, companies which use the Rufus admin system, such as Invesco, Framlington and Norwich Union, will have difficulties making the changes without a complete overhaul.

Companies may need to invest in completely new admin system costing millions.

However, the majority of the pre-Budget report&#39s Pep chan ges were welcomed by the industry.

The relaxation of Peps&#39 geographical restrictions will now open the door to the Pep transfer market for a number of fund managers that were previously excluded.

Framlington marketing director Craig Walton says: “For someone like Fram lington, whose funds are mostly non-Pep qualifying, this news will really catapult us right into the Pep transfer market.”