RBS 2006 Annual Report Download - page 165
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RBS Group • Annual Report and Accounts 2006
164
Notes on the accounts continued
Financial statements
26 Deferred taxation
Provision for deferred taxation has been made as follows: Group Company
2006 2005 2006 2005
£m £m £m £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
Fair
Accelerated value of
capital Deferred IAS financial Cash flow
Pension allowances Provisions gains transition instruments Intangibles hedging Other Total
£m £m £m £m £m £m £m £m £m £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.
Note:
(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.