RBS 2008 Annual Report Download - page 228

227RBS Group Annual Report and Accounts 2008
23 Deferred taxation
Provision for deferred taxation has been made as follows:
Group Company
2008 2007 2008 2007
£m £m £m £m
Deferred tax liability 4,165 5,400 —3
Deferred tax asset (7,082) (3,119) (3) —
Net deferred tax (2,917) 2,281 (3) 3
Group
Fair Available Tax
Accelerated value of for sale Cash losses
capital Deferred IFRS financial financial flow Share carried
Pension allowances Provisions gains transition instruments assets Intangibles hedging schemes forward Other Total
£m £m £m £m £m £m £m £m £m £m £m £m £m
At 1 January 2007 (628) 3,818 (284) 922 (669) (132) — 255 (97) (75) — (2) 3,108
Acquisition/(disposals)
of subsidiaries (119) (284) (539) 50 — (184) — 1,037 ——(867) (64) (970)
Charge/(credit) to
income statement 43 (138) (44) (141) 46 72 — (65) (48) 8 (57) 91 (233)
Charge/(credit) to
equity directly 660 ——(187) — 17 ——(107) 57 — (14) 426
Other (7) (12) (19) (38) 4 (6) 26 — (1) 20 (17) (50)
At 1 January 2008 (51) 3,384 (886) 606 (619) (233) — 1,253 (252) (11) (904) (6) 2,281
Transfers to disposal groups 19 69 528 36 ——80 (29) ———238 941
Acquisition/(disposals)
of subsidiaries — (509) —— 6 2 (2) 31——58 (441)
Charge/(credit) to
income statement 157 (127) (106) 21 195 (125) 350 (898) 286 (2) (3,079) 63 (3,265)
(Credit)/charge to
equity directly (476) —— (6) 13(547) — (317) 10 (709) (3) (2,044)
Other (31) 267 (350) (46) (3) — 84 445 (201) — (38) (516) (389)
At 31 December 2008 (382) 3,084 (814) 611 (420) (353) (35) 774 (483) (3) (4,730) (166) (2,917)
Cash
IFRS flow Total
Company transition hedging Other £m
At 1 January 2007 — (3) — (3)
Charge to equity directly —156
At 1 January 2008 — (2) 53
(Credit)/charge to income statement (4) 2 (5) (7)
Other 1—— 1
At 31 December 2008 (3) —— (3)
Notes:
(1) Deferred tax assets are recognised, as set out above, that depend on the availability of future taxable profits in excess of profits arising from the reversal of other temporary differences. Business
projections prepared for impairment reviews (see Note 17) indicate it is probable that sufficient future taxable income will be available against which to offset these recognised deferred tax assets
within 8 years. UK losses do not expire and Netherlands losses expire after nine years. In jurisdictions where doubt exists over the availability of future taxable profits, deferred tax assets of
£1,748 million (2007 – £687 million) have not been recognised in respect of tax losses carried forward of £5,779 million (2007 – £2,043 million). Of these losses, £15 million will expire within one
year, £137 million within five years and £5,214 million thereafter. The balance of tax losses carried forward has no time limit.
(2) Deferred tax liabilities of £980 million (2007 – £977 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.