For the attention of Mr Marius Kohl

Administration des Contributions Directes Bureau d'lmposition Societe VI 18, Rue du Fort Wedell L-2982 Luxembourg

14 January 2009

References: SAD/GAHE/SELL/BSLE/Q2708187M-CDT

Shire

Shire Holdings Europe Sarl - 2005 24 24330 Shire Holdings Ir eland Ltd, Luxembourg branch - 2005 3200 266 Shire Holdings EurO"pe No2 Sari - 2008 24 17428 Shire Holdings Ireland No2 Ltd, Luxembourg branch- 2008 32 00163

Project Domestos ("Project I") and Project Darwin ("Project II")

Dear Mr Kohl,

PriccwatcrhouscCoopcrs Socicte a responsabiJite limitce Rcviscur d'cntrcpriscs 400, route d'Esch B.P. 1443 L-1014 Luxembourg Telephone + 352 494848-1 Facsimile +352 494848-2900 www.pwc.com/lu info@lu.pwc.com

Further to our meetings dated 22 October 2008 and 3 December 2008, we are pleased to submit for your review and approval I comment the Luxembourg tax treatment of the following transactions. We also refer to our letter dated 16 July 2008 (ref.: SAD/JOMO/SELL/Q2708127M-CDT) and our letter dated 8 October 2008 (ref.: SAD/JOMO/SELL/Q2708157M-CDT).

A Description of the transactions

Within the framework of the reorganization of the Shire Group that started in April 2008 (see our letter dated 16 July 2008 referred above), the group increased its intra group financing through its Luxembourg entities, i.e. a Luxembourg permanent establishment ("Lux PE") and of a new Luxembourg company ("SHES 2") which form a tax unity.

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2 For your information, you will find enclosed a description of the Shire Group (Appendix 1 ), a chart of the current structure (Appendix 2), the restructuring steps (Appendix 3) as well as a chart of the final structure (Appendix 4).

B Applicable Luxembourg tax regime

As per our previous letter, please note that all Luxembourg entities of Shire Group have a USD functional currency for accounting and tax purposes.

Project I (18 July 2008 - 10 October 2008)

B.1 Lending activity financed by borrowings on a consolidated basis (until 9 January 2009)

3 Further to the transactions listed in Appendix 3, Lux PE and SHES2 will have, on a tax consolidated basis, a lending activity financed by borrowings of USD 3.65bn (please refer to Appendix 5).

4 Given the limited risks on this activity, a minimum profit margin reflecting the financing activity of the Luxembourg entities should amount to 1/32% of the outstanding amount on-lent. Such margin will be taxed each year at the standard Luxembourg tax corporate income tax, municipal business tax and net wealth tax.

B.2 Sale of SPIL from SHES2 to Ire HoldCo

5 On the 18 of July 2008, 100% of SPIL's shares held by SHES2 were transferred to Ire HoldCo for a fair market value ofUSD 506,105,355.

6 Further to this sale and in order not to challenge the margin which reflects the financing activity of the entities further to the steps occurred on 18 July 2008, Lux PE repaid USD 506, 105,355 of working capital to SHIL2. SHIL2 lent the same amount to Lux PE.

Project JI (26 November 2008- 9 January 2009)

B.3 Lending activity financed by interest free borrowings (from 27 November 2008 until 9 January 2009)

7 SHES2 will be in a back-to-back position for amount of approximately USD 2.6bio whereby its interest bearing receivables will be financed by an interest free loan from SBIL2, its Irish sister company.

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9 The deemed interest should be considered as added to the principal debt and also be subject to a notional interest deduction equal to the interest rates on the additional financing activities (in USD) less the 0.25% margin.

10 SHES2 will be entitled to deduct the nominal value of its non-interest bearing debt and the cumulative notional interest deduction from its unitary value for net wealth tax purposes. The taxable basis for the net wealth tax would therefore be composed of the taxable profit realized on the financing activity (if not distributed or reinvested in exempt assets).

B.4 Lending activity financed by borrowings on a consolidated basis (as from 9 J anuary 2009)

11 On 9 January, the USD 2.6bio interest free loan granted by SBIL2 to SHES2 has been repaid by SHES 2 through the novation of three of its receivables. Those receivables will be transferred by SBIL2 to SHIL2 and then by SHIL2 to Lux PE in exchange for a USD2.6bn receivable due from Lux PE. Finally, Lux PE transferred the receivables to SHES2 in exchange for an issue of shares.

12 Lux PE and SHES2 will have, on a tax consolidated basis, an increase of their lending activity financed by borrowings in an amount of USD 2.6 bn. (please refer to Appendix 5) to reach a global amount of USO 6.25 bn.

13 Given the limited risks on this activity, the minimum profit margin reflecting the financing activity of the Luxembourg entities should amount to 1/64% of the outstanding amount on-lent to the extent the principal amount of the debts and the receivables involved in the transactions would exceed USD 6,25bn.

14 The interest due by the Luxembourg branch to its head office but not paid should be treated as being repatriated to its head office and immediately reallocated to the Lux PE in a form of either an interest bearing loan or of an interest free loan if the interest received by SHES2 has been reinvested as equity in group companies.

15 Similarly, in case part of the principal of the loan would have been repaid and reinvested as equity in group companies, a corresponding amount of debt of

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Lux PE towards its head office will be made interest free or invested as branch capital, to respect the consolidated financing arrangements.

16 Finally, given on the one hand, the fact that Lux PE and S HES2 are involved in a lending activity financed by borrowings on a consolidated basis and on the other hand, that Lux PE's liability is towards its head office, no debt/equity ratio will apply in the hands of Lux PE.

8.5 Bonus issue of shares

17 SBH is held by both SPHIL and Shire Luxembourg. SPHIL holds however indirectly 100% of SBH, given its 100% shareholding in Shire Luxembourg.

18 The bonus issue of shares by SBH from its entire unrealized reserves to the benefit of SPHIL only should be analyzed, from a tax point of view, as follows: Shire Luxembourg should be deemed to receive bonus issue of shares (for the part corresponding to its shareholding in SBH). This should be considered as a hidden dividend distribution made from SBH to Shire Luxembourg. Further to this, Shire Luxembourg should be deemed to have distributed the shares received to SPHIL

19 Those operations will then not entail any adverse tax consequences to the extent participation exemption is available between SBH and Shire Luxembourg (see Appendix 5) and between Shire Luxembourg and SPHIL.

20 Based on article 166 of the Luxembourg Income Tax Law (hereafter LITL) and the Grand Ducal Decree dated 21 December 2001, in order to benefit from the participation exemption regime on dividend and capitati gains, the acquiring company must hold or undertakes to hold, for an uninterrupted period of 12 months, participation in the acquired company representing no less then 10% of the share capital or having an acquisition price of at least EUR 1.2mio (dividend) I EUR 6mio (capital gains).

21 With regard to the shareholding of Shire Luxembourg in SBH, Shire Luxembourg acquired ordinary shares in SBH for USD 12mio. Later on, one share has been converted into a preference share. SPHIL agreed to contribute to SBH, such amount of cash as is required to ensure that the preferred share held by Shire Luxembourg has a market value of no less than USD 11,999 ,997. Accordingly, Shire Luxembourg should be ensured to get back the value of its initial investment in the preference share in SBH of USD 11,999 ,997. Accordingly, at any time Shire Luxembourg should be considered as having shares of at least USD 11 ,999,997 in SBH.

23 In that scenario, the guarantee given by SPHIL could be waived. The condition of importance of the shareholding should indeed be considered as met as from the initial acquisition of the SBH shares for about USD 12mio and continued, where the participation of Shire Luxembourg in SBH achieved a threshold of at least I 0%.

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Taking into account the importance of the above for our client, we would respectfully request that you confirm the tax treatment of the situation described above or that you provide us with your remarks, if any.

We remain at your disposal should you need any further information and would like to thank you for the attention that you will &rive to our request.

Yours sincerely,

/ GJ~ ----/ _,,,/j~

Sarni Doucnias Partner

Appendices

Appendix l:Description of Shire Plc group Appendix 2:Current chart structure Appendix 3:Description of the transactions Appendix 4:Final chart structure Appendix 5: Tax analysis

Le prepose du bureau d' mposition Socit!tes 6 Marius oh/

Luxembourg, 1~ January 2009

Catherine Dupont Partner

This tax agreement is based on the facts as presented to PricewaterhouseCoopers Sa r. I. as at the date the advice was given. The agreement is dependent on specific f acts and circumstances and may not be appropriate to another party than the one for which i~ was prepared. This lax agreement was prepared with only the interests of PwC UK's Client, Shire Pharma9euticals Group Pie in mind, and was not planned or carried out in contemplation of any use by any other party. PricewaterhouseCoopers S.a r.I. , its partners, employees and or agents, neither owe nor accept any duty of care or any responsibility to any other party, whether in contract or in tort (including without limitation, negligence or breach of statutory duty) however arising, and shall not be liable in respect of any loss, damage or expense of whatever nature which is caused to any other party.

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Appendix 1

DESCRIPTION OF SHIRE PLC GROUP

Description of the Shire Group companies

Founded in 1986, Shire is a global specialty biophannaceutical Group, headed, since 23 May 2008 by Shire pie (''New Shire pie"). The group has revenues for the full year 2007 of USD2,436 million and the growth rates for revenues were 36% for 2007 over the prior year.

2 The Shire Group markets products to defined customer groups. The group currently focuses on three therapeutic areas, central nervous system disorders, gastrointestinal and renal diseases.

3 The group has a sale and marketing infrastructure with a broad portfolio of products targeting the US, Canada, UK, Republic of Ireland, France, Gennany, Italy and Spain, and also covers other significant pharmaceutical markets indirectly through distributors in Australia, Denmark, Finland, Hong Kong, Israel, Malaysia, Norway, Philippines, Singapore, South Africa, South Korea and Thailand.

4 With main offices in Basingstoke, United Kingdom and the U.S. in Wayne, PA, together with a network of offices and distribution channels throughout Europe, South America, Canada, and the Pacific Rim, Shire employs some 3,000 people who continue to carry forward many of the original attributes of its founders opportunistic thinking, transparent behaviour, a deep commitment to doing what is right, and a prevailing concern for the patients and caregivers served by its well-differentiated product lines.

5 Today, as a global specialty bio-pharmaceutical company listed on the London, NASDAQ exchanges, Shire is one of the fastest-growing pharmaceutical companies in the world. It is a company with a portfolio of top-selling products and promising late-stage development candidates.

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Appendix 2

CHART STRUCTURE BEFORE REORGANISATION (ABRIDGED)

Piil {Ire)

SPl2008 (Ire)

Bonus Debenture $0.18bn

' ' ' ' ' '

Bonus

; Deferred • Consideration ;$0.Bbn

'

SPI (US)

i 1 . 1 bn convertible bond LShire

SHUKCL UK

SEL (UK)

SHEL (UK)

BVICo (BVI)

$0.42bn

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Appendix 3

DESCRIPTION OF THE TRANSACTIONS

Only steps relevant for a full understanding of the Luxembourg tax analysis is described.

Project I ("Project Domestos")

On 18 .Tulv 2008

Step 1: SHUK transfers the USDO. 7bn bonus debenture due from SUSI to SHES2 in exchange for a USDO. 7bn loan receivable due from SHES2.

Step 2: SGF novates the USD[9m] accrued interest due from SUSI to SHES2, consideration to be left outstanding.

Step 3: SHUK novates the USD[4m] accrued interest due from SUSI to SHES2, consideration to be left outstanding.

Step 4: SHES 2 lends USD0.88bn to SUSHI

Step 5: SUSHI buys back its shares from SUSI in exchange for the transfer of the USD0.88bn bonus debenture due to SHES2. SUSI also transfers the USD14m accrued interest payable due to SHES2 to SUSHI , the consideration for which being USD14m cash.

Step 6: SUSHI uses the USD0.88bn cash received at step 4 to repay the USD0.88bn bonus debenture due to SHES2.

Step 10: SUSHI uses the USD14m cash received at step 5 to repay the USD14m accrued interest due to SHES2

Step 11: SHES2 uses the USD14m cash received at step 10 to repay the USD4m due to SHUK and the USD9m due to SGF.

Step 12: Ire HoldCo acquires SPIL from SHES2 for a fair market value of USD0.5bn consideration to be left outstanding.

Step 13: SHES 2 repays USD0.5bn of the USD0.7bn payable due to SHUK by novating the USD0.5bn receivable due from Ire HoldCo to SHUK.

Step 14: Lux PE repays USD0.5bn of working capital to SHIL2. SHIL2 lends USD0.5bn to Lux PE.

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On 10 October 2008

Step 15: SBH repaid USD 509,516,740 of the USD 1,008,067,500 payable due to SHES 2. Further to this, SHES 2 lent back the received amount (USO 509,516,740) to SDI GmbH which has been drawdown from time to time as of 31 October 2008 m consideration of an interest bearing loan of a corresponding amount to SDI GmbH.

Pro ject II ("Project Darwin - phase IV)

On 26 November 2008

Step 1: SBH amends its articles of association to convert one of the ordinary shares held by Shire Luxembourg Sarl to a preferred share which ranks pari passu with the ordinary shares except for step 14 unless and until a capital payment of no less than USDl 1,999,997 has been paid in respect of the preferred share.

Step 2: SPHIL enters into a deed of contribution with SBH and Shire Luxembourg Sari such that if the market value of SBH when it is sold or wound up is less than USDl 1,999,997, then, SPHIL agrees to contribute, such amount of cash as is required to ensure that SBH has a market value of no less than USD 11 ,999 ,997.

Step 3: SBH makes a bonus issue of shares from its entire unrealized reserves to SPHIL for about $5.3bn. SBH will then fully reduce its share premium account by approximately $241m and part reduce it share capital by approximately $1. lbn to the benefit of SPHIL.

On 27 November 2008

Step 4:SHAG novates the USD1.8bn receivable due from SHUSAG to SHES2 m exchange for a USDl .8bn interest free receivable due from SHES2.

Step 5: SHES2 novates the USD1.8bn receivable due from SHUSAG and the USD1.8bn payable due to SHAG to SHIL2.

Step 6: SHIL2 incorporates Shire Biopharmaceuticals Ireland No.2 Ltd ("SBIL2") with USD 100 share capital.

Step 7: SHIL2 novates the USDI .8bn receivable due from SHUSAG to SBIL2 m exchange for a USD1.8bn interest free receivable due from SBIL2.

Step 8: SBIL2 novates the USD1.8bn receivable due from SHUSAG to SHES2 m exchange for a USDl .8bn interest free receivable due from SHES2.

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On 28 November 2008

Step 9: SHAG novates the USD0.6bn receivable due from SPG and the USD0.2bn receivable due from SHUK to SHES2 in exchange for a USD0.8bn interest free receivable due from SHES2.

Step 10: SHES2 novates the USD0.6bn receivable due from SPG, the 0.2bn receivable due from SHUK and the USD0.8bn payable due to SHAG to SHIL2.

Step 11: SHIL2 novatcs the USD0.6bn receivable due from SPG and the USD0.2bn receivable due from SHUK to SBIL2 in exchange for a VSD0.8bn interest free receivable due from SBIL2.

Step 12: SBIL2 novates the USD0.6bn receivable due from SPG and the USD0.2bn receivable due from SHUK to SHES2 in exchange for a USD0.8bn interest free receivable due from SHES2.

Step 13: SBH repays the USD498m payable due to SHES2 by novating USD498m of the USD 4.75bn receivable due from SPHIL, to SHES2.

Step 14: SBH reduces its share capital to SPHIL only, except for an equivalent number of shares which Shire Luxembourg Sari holds in SBH and returns capital to SPHIL by the cancellation of the USD[ 4.21 ]bn receivable due to SPHIL.

On 9 January 2009

Step 15: SHES 2 novates the USD1.8bn receivable due from SHUSAG, the USD0.6bn receivable due from SPG and the USD0.2bn receivable due from SHUK to SBIL2 in settlement of the USD2.6bn loan payable due to SBIL2 (created in step 8 and 12).

Step 16: SBIL2 novates the USDI .8bn receivable due from SHUSAG, the USD0.6bn receivable due from SPG and the USD0.2bn receivable due from SHUK to SHIL2 in settlement of the USD2.6bn payable due to SHIL2 (created in step 7 and 11 ).

Step 17: SHIL2 transfers the USD1.8bn receivable due from SHUSAG, the USD0.6bn receivable due from SPG and the USD0.2bn receivable due from SHUK to Lux PE in exchange for a USD2.6bn receivable due from Lux PE (interest rate to ensure l/32"d spread in Luxembourg).

Step 18: Lux PE contributes the USDI .8bn receivable due from SHUSAG, the USD0.6bn receivable due from SPG and the USD0.2bn receivable due from SHUK to SHES2 in exchange for an issue of shares.

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FINAL CHART STRUCTURE (ABRIDGED)

SDI GmbH (Ger)

SBIL2 (Ire)

$0.88bn

SPHIL (Ire)

$2.6bn

SHAG (Ire M&C)

SUSHI (US)

$1.1bn convertible bond

$2.9bn SBH (UK)

SPG (UK)

SHUK (UK)

SGF (UK)

Appendix 4

LShire

SILBV (Neths)

SHUKCL UK

SEL (UK)

SHEL (UK)

Please note that SHIL (UK) and its Lux PE are not represented in this chart.

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Appendix 5

Tax analysis

A Lending activity financed by borrowings on a tax consolidated basis

1 The Luxembourg entities would increase their lending activity financed by borrowings on a tax consolidated basis in two stages, for a global amount of USO 3.lbn. A first increase has been operated under Project Domestos amounting to USD 0.5bn. And a second one would occur under Project Darwin - Phase IV, amounting to USD 2.6 bn. Therefore, Lux PE and SHES 2 will be in a lending activity financed by borrowings on a tax consolidated basis for a global amount of USO 6.25 bn (please refer to our previous letter dated 16 July 2008, ref. SAD/JOMO/SELL/Q2708127M-CDT).

2 The Luxembourg entities should not incur any significant default risk nor foreign exchange exposure as the debts instruments are Dollar denominated.

The Luxembourg entities (Lux PE and SHES 2) would compute the profit deriving from the lending activity pursuant to standard tax rules. The profit will be considered as appropriate and acceptable with respect to transfer pricing policy and Articles 56 and 164(3) LITL as long as it represents at least 1132% of the outstanding amount on-lent per annum (minimum taxable basis from which limited current expenses can be deducted). The arm's length character of this minimum margin should be reviewed and decreased to 1/64% if the principal amount of the debts and the receivables involved in the transactions exceed USD 6,25bn. In the event, where the profit, as computed pursuant to standard rules, would be lower than the minimum taxable margin, it would be re-valued up to this minimum taxable margin. On the contrary case, should it be higher, this higher amount would be subject to tax.

3 The profit, as computed pursuant to standard rules or as re-valued up to the minimum taxable margin will be subject to corporate income tax and municipal business tax at the normal rates and also to net wealth tax.

4 The interest received could be lent by SHES2 to group companies or invested in group companies.

5 To respect the consolidated financing arrangements, the interest due by the Lux branch (Lux PE) to its headoffice (SHIL2) but not paid should be treated as being repatriated to its head office and immediately reallocated to the Lux branch in a form of either an interest bearing loan or of an interest free loan if the interest received by the Luxembourg companies have been reinvested in group companies.

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6 Similarly, in case part of the principal of the loan would have been repaid and reinvested as equity in group companies, a corresponding amount of debt of Lux PE towards its head office (SHIL2) will be made interest free or invested as branch capital, to respect the consolidated financing arrangements.

B Participation exemption

7 Based on article 166 of the Luxembourg [ncome Tax Law (hereafter LITL) and the Grand Ducal Decree dated 21 December 2001, in order to benefit from the participation exemption regime on dividend and capital gains, the acquiring company must hold or undertakes to hold, for an uninterrupted period of 12 months, participation in the acquired company representing no less than 10% of the share capital or having an acquisition price of at least EUR I .2mio (dividend) I EUR 6mio (capital gain).

8 Shire Luxembourg acquired ordinary shares in SBH for USO 11 ,999,997. Later on, one of the ordinary share was converted into a preference share. This preference share ranks pari passu with the ordinary shares unless and until a capital payment of no less than USO 11,999,997 has been paid in respect of the preferred share, except for step 14 (Project II) (i.e. share capital reduction of SBH to the benefit of SPHIL only).

9 The bonus issue of shares from SBH's unrealized reserves to SPHIL at step 3 (Project II) could impact the value of the Shire Luxembourg shareholding in SBH. However, SPHIL agreed to contribute to SBH, such amount of cash as is required to ensure that the preference share held by Shire Luxembourg has a market value of no less than USO 11,999,997. Accordingly, Shire Luxembourg should be ensured to get back the value of its initial investment in the preference share in SBH of USO 11 ,999,997. Accordingly, at any time Shire Luxembourg should be considered as having shares of at least USD 11,999,997 in SBH.

I 0 At step 14 (Project II), SBH share capital reduction to SPHIL only will entail an increase of the holding threshold of Shire Luxembourg in SBH. At this stage and to the extent this threshold would be higher than 10%, conditions of the participation exemption regime would be met both in term of holding percentage and acquisition price.

11 Accordingly, if after this step, the guarantee given be SPHIL is waived and if it can not be considered anymore that Shire Luxembourg has a participation of at least the equivalent in USD of EUR 6mio, condition of the participation exemption with regard to the importance of the shareholding should still be met provided the holding percentage in SBH is of at least 10%.

12 In that scenario, the condition of importance of the shareholding should be considered as met as from the initial acquisition of the SBH shares for about USD l 2mio and continued, where the participation of Shire Luxembourg in SBH achieved a threshold of at least 10%.

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