The deferred tax balances are as follows:
 |
|
|
As at 31 |
As at 31 |
|---|---|---|
|
Deferred tax liability arising in overseas entities |
(259) |
(195) |
|
Deferred tax asset/(liability) arising in UK entities |
988 |
(101) |
|
|
729 |
(296) |
The movement in deferred tax asset/(liabilities) during the year is as follows:
|
|
|
Net liability |
(Charged)/ |
(Charged)/ |
Net asset |
|---|---|---|---|---|
|
Unrealised gains and losses on investments and debt liabilities |
(458) |
624 |
18 |
184 |
|
Excess of depreciation over capital allowances |
32 |
9 |
– |
41 |
|
Temporary differences between the accounts and tax deduction for expenses |
7 |
128 |
(64) |
71 |
|
Temporary differences between the accounts and tax deduction for actuarial reserves |
(163) |
(66) |
(22) |
(251) |
|
Tax losses carried forward |
232 |
436 |
17 |
685 |
|
Temporary differences in relation to the pension fund deficit |
51 |
(5) |
(7) |
39 |
|
Other temporary differences |
3 |
– |
– |
3 |
|
|
(296) |
1,126 |
(58) |
772 |
|
Acquisition in the year of Nationwide Life Limited, Nationwide Unit Trust Managers Limited and Suffolk Life Group Plc |
(44) |
1 |
– |
(43) |
|
Deferred tax asset/(liabilities) |
(340) |
1,127 |
(58) |
729 |
Included in the amounts (charged)/credited to income and equity above is £3m (2007: £9m) relating to the change in UK corporation tax rate from 30% to 28% in April 2008.
|
|
|
Net liability |
(Charged)/ |
(Charged)/ |
Net asset |
|---|---|---|---|---|
|
Unrealised gains and losses on investments and debt liabilities |
(703) |
247 |
(2) |
(458) |
|
Excess of depreciation over capital allowances |
33 |
(1) |
– |
32 |
|
Temporary differences between the accounts and tax deduction for expenses |
46 |
(38) |
(1) |
7 |
|
Temporary differences between the accounts and tax deduction for actuarial reserves |
(136) |
(27) |
– |
(163) |
|
Tax losses carried forward |
232 |
– |
– |
232 |
|
Temporary differences in relation to the pension fund deficit |
53 |
5 |
(7) |
51 |
|
Other temporary differences |
3 |
– |
– |
3 |
|
Deferred tax asset/(liabilities) |
(472) |
186 |
(10) |
(296) |
No deferred tax is recognised on the unremitted earnings of overseas subsidiaries, as the Group is able to control the remittance of earnings to the UK and there is no intention to remit any such earnings to the UK in the foreseeable future if the remittance would trigger any incremental UK tax liability. The maximum estimated temporary differences unprovided for are set out below, grouped by country. The calculation of the maximum temporary difference takes no account of any foreign tax suffered on the earnings in the jurisdiction of the foreign entity which might be available by way of double tax relief to reduce any UK tax liability arising on remittance.
|
|
|
2008 |
2007 |
|---|---|---|
|
USA |
486 |
369 |
|
France |
95 |
63 |
|
|
581 |
432 |
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
The Group has unrelieved trading losses carried forward as at 31 December 2008 of £58m (2007: £15m). No deferred tax asset has been recognised in respect of these losses as at 31 December 2008 (or 31 December 2007), as it is probable that there will be no suitable profits emerging in future periods against which to relieve them. Relief for these losses will only be obtained if it becomes probable that suitable profits will arise in future periods. The potential deferred tax asset unrecognised as at 31 December 2008 is £17m (2007: £4m).
The Group has unrelieved post-cessation trading losses carried forward as at 31 December 2008 of £19m (2007: £18m). No deferred tax asset has been recognised in respect of these losses as at 31 December 2008 (or 31 December 2007), as it is probable that there will be no suitable profits emerging in future periods against which to relieve them. Relief for these losses will only be obtained if it becomes probable that suitable post-cessation trading profits will arise in future periods. The potential deferred tax asset unrecognised as at 31 December 2008 is £5m (2007: £5m).
The Group has surplus non-trading loan relationship deficits and management expenses carried forward as at 31 December 2008 of £17m (2007: £17m). No deferred tax asset has been recognised in respect of these deficits and expenses as at 31 December 2008 (or 31 December 2007), as it is probable that there will be no suitable profits emerging in future periods against which to relieve them. Relief for these deficits and expenses will only be obtained if it becomes probable that suitable profits will arise in future periods. The potential deferred tax asset unrecognised as at 31 December 2008 is £5m (2007: £5m).
The Group has net realised and unrealised capital losses carried forward as at 31 December 2008 of £724m (2007: £2m). No deferred tax asset has been recognised in respect of these losses as at 31 December 2008 (or 31 December 2007) as it is probable that there will be no suitable profits emerging in future periods against which to relieve them. Relief for these losses will only be obtained if it becomes probable that suitable profits will arise in future periods. The potential deferred tax asset unrecognised as at 31 December 2008 is £155m (2007: £1m).