New Draft Tax Legislation

Legal & General Group PLC
04 October 2005



Re New Draft Tax Legislation



Legal & General Group Plc ('Legal & General') is aware that the Economic
Secretary to the Treasury announced late last Thursday new draft tax legislation
affecting 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 the
accumulated non-profit reserves in our UK Long Term Fund, then we estimate the
additional tax charge which could be reflected in our European Embedded Value
accounts could be of the order of £200 million.



Our European Embedded Value accounts already assume the tax effect of
distributing reserves over a period.  Our International Financial Reporting
Standards (IFRS) accounts do not make such an assumption.  Accordingly, the
potential impact of the draft legislation on our IFRS accounts would be larger
and, in 2005, could result in a one-off current tax charge of an amount up to of
the order of £500 million.



The above management estimates are provisional and are based upon draft
legislation which is very uncertain. They have not been audited or subject to
external actuarial review.



Sir David Prosser, Group Chief Executive, commented 'This draft legislation has
been published without any consultation.  The Government is proposing
retrospective taxation on reserves which provide security for this industry's
customers.  Our accumulated reserves have been built up over many years and
include funds which have already been taxed.



It is our understanding that the industry will be lobbying strongly to have this
draft legislation withdrawn or amended. Legal & General will fully support such
measures.'





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





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