The deferred tax balances are as follows:
(Download XLS:)  |
|
|
As at |
As at |
|---|---|---|
|
Deferred tax liability arising in overseas entities |
(303) |
(259) |
|
Deferred tax asset arising in UK entities |
796 |
988 |
|
|
493 |
729 |
The movement in deferred tax asset/(liabilities) during the year is as follows:
| (Download XLS:) |
|
|
Net asset |
(Charged)/ credited to the income statement |
(Charged)/ credited to equity |
Net asset |
|---|---|---|---|---|
|
Unrealised gains and losses on investments |
184 |
(215) |
(34) |
(65) |
|
Excess of depreciation over capital allowances |
41 |
1 |
– |
42 |
|
Temporary differences between the accounts |
71 |
(126) |
28 |
(27) |
|
Temporary differences between the accounts |
(251) |
54 |
20 |
(177) |
|
Tax losses carried forward |
685 |
(5) |
(18) |
662 |
|
Temporary differences in relation to the |
39 |
(19) |
59 |
79 |
|
Other temporary differences |
3 |
4 |
– |
7 |
|
Acquisition of Nationwide Life Limited, Nationwide Unit Trust Managers Limited and Suffolk Life Group Plc |
(43) |
15 |
– |
(28) |
|
Deferred tax asset/(liabilities) |
729 |
(291) |
55 |
493 |
|
|
|
|
|
|
|
|
Net liability |
Credited/ (charged) to the income statement |
Credited/ (charged) to equity |
Net asset |
|
Unrealised gains and losses on investments |
(458) |
624 |
18 |
184 |
|
Excess of depreciation over capital allowances |
32 |
9 |
– |
41 |
|
Temporary differences between the accounts |
7 |
128 |
(64) |
71 |
|
Temporary differences between the accounts |
(163) |
(66) |
(22) |
(251) |
|
Tax losses carried forward |
232 |
436 |
17 |
685 |
|
Temporary differences in relation to the |
51 |
(5) |
(7) |
39 |
|
Other temporary differences |
3 |
– |
– |
3 |
|
|
(296) |
1,126 |
(58) |
772 |
|
Acquisition of Nationwide Life Limited, Nationwide Unit Trust Managers Limited and Suffolk Life Group Plc |
(44) |
1 |
– |
(43) |
|
Deferred tax (liabilities)/asset |
(340) |
1,127 |
(58) |
729 |
Included in the amounts credited/(charged) to income and equity in 2008 is £3m relating to the change in UK corporation tax rate from 30% to 28% in April 2008.
Following a change in UK tax law, all dividends paid on or after 1 July 2009 from L&G Group companies will be exempt from UK tax. No UK tax liability will therefore arise in respect of any remittance of earnings from overseas subsidiaries. As such, no deferred tax liability is recognised on these profits. Furthermore, it is expected that no foreign tax will arise on the earnings in the jurisdiction of the foreign entity upon distribution and as such no deferred tax has been provided in respect of foreign tax.
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 2009 of £25m (2008: £58m). No deferred tax asset has been recognised in respect of these losses as at 31 December 2009 (or 31 December 2008), 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 2009 is £8m (2008: £17m).
The Group has unrelieved post-cessation trading losses carried forward as at 31 December 2009 of £15m (2008: £19m). No deferred tax asset has been recognised in respect of these losses as at 31 December 2009 (or 31 December 2008), 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 of trade profits will arise in future periods. The potential deferred tax asset unrecognised as at 31 December 2009 is £4m (2008: £5m).
The Group has surplus non-trading loan relationship deficits and management expenses carried forward as at 31 December 2009 of £17m (2008: £17m). No deferred tax asset has been recognised in respect of these deficits and expenses as at 31 December 2009 (or 31 December 2008), 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 2009 is £5m (2008: £5m).
The Group has capital losses carried forward as at 31 December 2009 of £77m (2008: £724m). No deferred tax asset has been recognised in respect of these losses as at 31 December 2009 (or 31 December 2008) 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 2009 is £15m (2008: £155m).
