New Zealand Tax Proposals

Guinness Peat Group PLC
17 May 2006


                            GUINNESS PEAT GROUP PLC

                                  ANNOUNCEMENT


The following is the text of an announcement made by Guinness Peat Group plc 
('GPG' or 'the Company') today on the New Zealand Stock Exchange.  This
announcement follows a letter sent by the Company to its shareholders on 4 May
2006 in connection with certain taxation proposals made by the New Zealand
government.  This concerned the New Zealand government's proposals regarding
local tax rules on share investments.  The government has now made certain
amendments which are expected to benefit New Zealanders with shareholdings in
overseas investments such as GPG.

"GPG director Tony Gibbs today welcomed the New Zealand government's
announcement that New Zealand shareholders in GPG will be granted a five year '
holiday' from the proposed New Zealand tax regime for offshore share
investments.

The 'holiday' for New Zealand shareholders in GPG will mean that individuals,
companies and trusts which invest directly in GPG who do not actively trade
their shares will continue to be taxed in New Zealand on dividends only.  Until
at least 31 March 2012 New Zealand shareholders in GPG will pay no more tax in
respect of their GPG shares than under current law.

The five year holiday gives time for the government to review New Zealand's CFC
(controlled foreign company) regime and for GPG to look at restructuring options
once a new CFC regime is in place. GPG has at this time formed no particular
view as to the outcome of any review and analysis.

'This is great news for our 28,500 New Zealand shareholders many of whom have
expressed their views to the government. It is also heartening that the
government has listened and has recognized the significance of GPG to New
Zealand' said Tony Gibbs.

'I have been impressed that both Ministers and officials have continued to keep
an open dialogue with GPG in an attempt to resolve this issue and on behalf of
our shareholders I thank them for this.'

'I would like to thank all the hundreds of GPG shareholders who have taken the
time to express their views to the government and who have offered GPG their
support over this issue.' "


J R Russell
Company Secretary


17 May 2006




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