Aviva 2006 Annual Report Download - page 143

Overview Business review Governance Financial statements Other information
Aviva plc
Annual Report and Accounts 2006 139
12 – Tax continued
(iii) The tax charge can be analysed as follows:
2006 2005
£m £m
UK tax 479 1,150
Overseas tax 455 402
934 1,552
(iv) Unrecognised tax losses and temporary differences of previous years were used to reduce current tax expense and deferred tax
expense by £73 million and £24 million, respectively (2005: £49 million and £33 million, respectively).
(v) Deferred tax charged to the income statement represents movements on the following items:
2006 2005
£m £m
Long-term business technical provisions and other insurance items 364 (107)
Deferred acquisition costs (47) 56
Unrealised (gains)/losses on investments (144) 562
Provisions and other temporary differences (192) 35
Impairment of assets 1(1)
Pensions and other post-retirement obligations 166 19
Unused losses and tax credits (247) 247
Other temporary differences 298 154
Total deferred tax charged to income statement 199 965
(b) Tax charged/(credited) to equity
(i) The total tax charge/(credit) comprises:
2006 2005
£m £m
Current tax (9) (13)
Deferred tax 14 (262)
Total tax charged/(credited) to equity 5(275)
Deferred tax charged to equity includes £29 million credit (2005: £213 million credit) in respect of pensions and other post-retirement
obligations, and a deferred tax charge of £43 million (2005: £49 million credit) in respect of unrealised gains on investments.
(ii) The tax credit attributable to policyholders’ returns included in the credit above is £nil (2005: £3 million).
(c) Tax reconciliation
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the tax rate of the home country of
the Company as follows:
2006 2005
£m £m
Profit before tax 3,323 3,450
Tax calculated at standard UK corporation tax rate of 30% (2005: 30%) 997 1,035
Different basis of tax for UK life insurance 209 616
Adjustment to tax charge in respect of prior years (287) (253)
Non-assessable dividends (55) (26)
Non-taxable profit on sale of subsidiaries and associates (80) (4)
Disallowable expenses 46 55
Different local basis of tax on overseas profits 201 168
Deferred tax assets not recognised (60) (25)
Other (37) (14)
Total tax charge to income statement (note 12a) 934 1,552