Pharmaceutical Company Acknowledges IRS Claim for Additional Taxes

[2] Disagreements with and between revenue authorities as to tax allocations between related companies in different tax jurisdictions are inevitable for a global business such as GSK. Before receiving this notice, the company attempted to resolve the dispute by referring it to negotiations between the US and UK tax authorities. The company believes these discussions collapsed when the UK supported the GSK position that no additional taxes were due to the IRS.

[3] The company continues to believe, based on external professional advice, that it has made adequate provision for tax liabilities which could arise from these tax assessments. However, there continues to be a wide difference of views between GSK and the IRS. GSK considers that the additional tax claim by the IRS on Glaxo heritage products is inconsistent with the treatment of other pharmaceutical companies, including GSK legacy company SmithKline Beecham.

[4] GSK plans to contest this claim for additional taxes by filing a petition in the US Tax Court, where a trial is not expected until sometime in 2005-2006.

[5] GSK also continues to believe that the profits reported by its US subsidiaries for the period 1989-2000, on which it has paid taxes in the United States, are more than sufficient to reflect the activities of its US operations.

[6] GlaxoSmithKline, one of the world's leading research-based pharmaceutical and healthcare companies, is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For more information, please visit the company's web site at gsk.com.

Cautionary statement regarding forward-looking Statements

[7] Under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995, the company cautions investors that any forward-looking statements or projections made by the company, including those made in this Announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect the Group's operations are described under 'Risk Factors' in the Operating and Financial Review and Prospects in the company's Annual Report on Form 20-F for 2002.

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