Unilife Corporation - Tax Ruling

Tax Ruling

SCRIP FOR SCRIP ROLLOVER RELIEF UNDER REDOMICILIATION CONFIRMED BY AUSTRALIAN TAXATION OFFICE

8 March 2010

Unilife Corporation (Unilife or the Company) (ASX:UNS) is pleased to advise shareholders that the Australian Taxation Office (ATO) has now issued Class Ruling CR 2010/6 (Class Ruling) in connection with the redomiciliation of the Unilife group in the United States.

Under the Class Ruling, the ATO has provided confirmation that Australian security holders of Unilife Medical Solutions Limited (UMSL) (as described in the Class Ruling) will be eligible for scrip for scrip capital gains tax roll-over relief with respect to the exchange of their shares and standalone options in UMSL for replacement securities in the Company as part of the redomiciliation. This ruling is consistent with the Company's request to the ATO and also the expectations as described in the Information Memorandum that was sent to all security holders for the Scheme Meetings.

A copy of the Class Ruling is available here and from the ATO

Further details of the tax implications arising in relation to the exchange of shares and options in UMSL for equivalent securities in Unilife are set out in section 9 of the Information Memorandum which was prepared in connection with the redomiciliation.

Security holders should seek their own independent tax advice having regard to their individual circumstances prior to relying on the tax information contained in the Class Ruling and Information Memorandum.

View a copy of the Information Memorandum here.

The FAQ set out below relates to the ATO Class Ruling with respect to the replacement of shares and standalone options (including options issued in connection with the 2009 placement) on the redomiciliation.

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1. When do I have to make an election for scrip for scrip rollover relief if I wish to do so?

You should make the election before you lodge your tax return for the current tax year.

2. Will I have to pay tax as a result of receiving CDIs, shares of common stock or options (as applicable) in Unilife Corporation (UNS) in exchange for my Unilife Medical Solutions Limited (UNI) securities on the redomiciliation?

2.1 If you make the scrip for scrip roll-over election

Provided that you are a resident of Australia for tax purposes and the conditions contained in Class Ruling CR 2010/6 have been satisfied, you will not be required to pay tax on the receipt of your CDIs, shares of common stock or options which you received in Unilife Corporation on the redomiciliation.

For the purpose of determining whether you have satisfied the conditions specified in the Class Ruling, a copy of the Class Ruling is available on our website or may be downloaded from the Australian Taxation Office website.

As everybody's circumstances are different, we recommend that you consult your tax adviser before taking any action.

2.2 If you do not make the scrip for scrip roll-over election

The receipt of common stock, CDIs or options in Unilife Corporation (UNS) in exchange for the transfer of your shares or cancellation of your options in Unilife Medical Solutions Limited (UNI) may be taxable in the tax year ended 30 June 2010 if you have made a capital gain.

You will make a capital gain in circumstances where the capital proceeds received from the cancellation of your Unilife Medical Solutions Limited (UNI) securities are greater than their cost base (see question 4 below relating to the cost base of Unilife Corporation securities).

You will make a capital loss in circumstances where the capital proceeds received from the cancellation of your Unilife Medical Solutions Limited (UNI) securities are less than their reduced cost base (see question 4 below relating to the cost base of Unilife Corporation securities).

Capital proceeds on disposal of shares

Where a share in Unilife Medical Solutions Limited (UNI) was exchanged for a CDI in Unilife Corporation (UNS), the capital proceeds for the disposal of each UNI share will be $1.30.

Where six shares in Unilife Medical Solutions Limited (UNI) were exchanged for a share of common stock in Unilife Corporation (UNS), the capital proceeds for the disposal of each UNI share will be $1.30 (approximately one-sixth of $7.81).

Capital proceeds on cancellation of options

The capital proceeds for each option cancelled were one-sixth of the market value of the Unilife Corporation option that was received in exchange for cancellation of your UNI option.

For further information, please see Class Ruling CR 2010/6.

A copy of this Class Ruling is available here or can be downloaded from the ATO website.

As everybody's circumstances are different, we recommend that you consult your tax adviser before taking any action.

3. Where can I get a copy of the Class Ruling CR 2010/6?

You may download a copy of the Class Ruling here and may also be obtained from the Australian Taxation Office website.

4. What will be the cost base (or reduced cost base) of the CDIs, shares of common stock or options in Unilife Corporation (UNS) that I acquired on the redomiciliation if I make the scrip for scrip roll-over election?

The first element of the cost base (or reduced cost base) of each CDI, share of common stock or option acquired in Unilife Corporation (UNS) will be the cost base (or reduced cost base) that you had in the equivalent Unilife Medical Solutions Limited (UNI) securities (which have since been replaced). We expect that the other elements of the cost base of the relevant securities to be minimal (if any).

Further information on the cost base (or reduced cost base) is set out in Class Ruling CR 2010/6.

A copy of this Class Ruling is available here or can be downloaded from the ATO website.

As everybody's circumstances are different, we recommend that you consult your tax adviser before taking any action.

5. What will be the acquisition date for capital gains tax purposes in respect of the CDIs, shares of common stock or options which I acquired in Unilife Corporation (UNS) on the redomiciliation?

5.1 If you make the scrip for scrip election

If you make the scrip for scrip election, the acquisition date for capital gains tax purposes will be the date on which you acquired your original shares or options in Unilife Medical Solutions Limited (UNI).

5.2 If you do not make the scrip for scrip election

If you do not make the scrip for scrip election, the acquisition date for capital gains tax purposes will be 27 January 2010 (which was the implementation date for the schemes of arrangement).

Further information on this issue is set out in Class Ruling CR 2010/6.

A copy of this Class Ruling is available here or can be downloaded from the ATO website.

As everybody's circumstances are different, we recommend that you consult your tax adviser before taking any action.

6. What will be the date of the Capital Gains Tax Event in respect of the disposal of UNI shares that were transferred or cancelled upon the redomiciliation, if I did not make the scrip for scrip roll-over election?

The Capital Gains Tax Event date will be 27 January 2010 (which was the implementation date for the schemes of arrangement).

Further information on this issue is set out in Class Ruling CR 2010/6.

A copy of this Class Ruling is available here or can be downloaded from the ATO website.

As everybody's circumstances are different, we recommend that you consult your tax adviser before taking any action.

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