26. Deferred taxation
Provision for deferred taxation has been made as follows:
| Group | Company | |||
| 2006 £m |
2005 £m |
2006 £m |
2005 £m |
|
| Deferred tax liability | 3,264 | 1,695 | — | — |
| Deferred tax asset (included in Prepayments, accrued income and other assets, Note 20) | (156) | (156) | (3) | (3) |
| Net deferred tax | 3,108 | 1,539 | (3) | (3) |
| Group | ||||||||||
| Pension £m |
Accelerated capital allowances £m |
Provisions £m |
Deferred gains £m |
IAS transition £m |
Fair value of financial instru- ments £m |
Intangibles £m |
Cash flow hedging £m |
Other £m |
Total £m |
|
| At 1 January 2005 | (999) | 3,205 | (682) | 142 | (275) | 65 | 162 | 12 | 149 | 1,779 |
| Charge to income statement | 53 | 433 | 52 | (21) | (52) | 48 | (18) | — | (125) | 370 |
| Charge to equity directly | (238) | — | — | — | — | (217) | — | (59) | (39) | (553) |
| Other | 2 | 15 | (34) | — | — | (4) | 4 | 2 | (42) | (57) |
| At 1 January 2006 | (1,182) | 3,653 | (664) | 121 | (327) | (108) | 148 | (45) | (57) | 1,539 |
| Charge to income statement | 57 | 254 | 360 | 131 | (365) | (34) | 127 | (1) | (30) | 499 |
| Charge to equity directly | 519 | — | — | 666 | (2) | 2 | — | (41) | (14) | 1,130 |
| Other | (22) | (89) | 20 | 4 | 25 | 8 | (20) | (10) | 24 | (60) |
| At 31 December 2006 | (628) | 3,818 | (284) | 922 | (669) | (132) | 255 | (97) | (77) | 3,108 |
| Company* | |
| £m | |
| At 1 January 2005 | (5) |
| Charge to equity directly | 2 |
| At 1 January 2006 and 31 December 2006 | (3) |
* All relates to hedging
Notes
(1) Deferred tax assets of £86 million (2005 – £51 million) have not been recognised in respect of tax losses carried forward of £254 million (2005 – £150 million) as it is not considered probable that taxable profits will arise against which they could be utilised. Of these losses, £44 million will expire within one year and a further £92 million within five years. The balance of tax losses carried forward has no time limit.
(2) Deferred tax liabilities of £649 million (2005 – £830 million) have not been recognised in respect of retained earnings of overseas subsidiaries and held-over gains on the incorporation of overseas branches. Retained earnings of overseas subsidiaries are expected to be reinvested indefinitely or remitted to the UK free from further taxation. No taxation is expected to arise in the foreseeable future in respect of held-over gains.
© 2007