4th Oct 2005 07:24
Legal & General Group PLC04 October 2005 Re New Draft Tax Legislation Legal & General Group Plc ("Legal & General") is aware that the EconomicSecretary to the Treasury announced late last Thursday new draft tax legislationaffecting life insurance companies. The scope and full impact of the draft legislation is materially unclear.However, if the proposed legislation were enacted and were to apply to theaccumulated non-profit reserves in our UK Long Term Fund, then we estimate theadditional tax charge which could be reflected in our European Embedded Valueaccounts could be of the order of £200 million. Our European Embedded Value accounts already assume the tax effect ofdistributing reserves over a period. Our International Financial ReportingStandards (IFRS) accounts do not make such an assumption. Accordingly, thepotential impact of the draft legislation on our IFRS accounts would be largerand, in 2005, could result in a one-off current tax charge of an amount up to ofthe order of £500 million. The above management estimates are provisional and are based upon draftlegislation which is very uncertain. They have not been audited or subject toexternal actuarial review. Sir David Prosser, Group Chief Executive, commented "This draft legislation hasbeen published without any consultation. The Government is proposingretrospective taxation on reserves which provide security for this industry'scustomers. Our accumulated reserves have been built up over many years andinclude funds which have already been taxed. It is our understanding that the industry will be lobbying strongly to have thisdraft legislation withdrawn or amended. Legal & General will fully support suchmeasures." Enquiries to: Investors:Andrew Palmer, Group Director (Finance) 020 7528 6286 Peter Horsman, Head of Investor Relations 020 7528 6362 Nicola Marshall, Investor Relations Manager 020 7528 6263 Media:John Morgan, Media Relations Director 020 7528 6213 Anthony Carlisle, Citigate Dewe Rogerson 07973 611888 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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