Barclays 2012 Annual Report Download - page 251

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10 Tax continued
The table below shows the components of deferred tax amounts on the balance sheet. Positive amounts in liabilities relate to deferred tax assets
in entities that are in a net liability position on the balance sheet.
Fixed asset
timing
differences
£m
Available
for sale
investments
£m
Cash flow
hedges
£m
Retirement
benefit
obligations
£m
Loan
impairment
allowance
£m
Other
provisions
£m
Tax losses
carried
forward
£m
Share
based
payments
£m
Other
£m
Total
£m
Assets 17 43 – 93 376 96 1,346 329 716 3,016
Liabilities (84) (49) (661) (337) 81 9 290 167 (135) (719)
At 31 December 2012 (67) (6) (661) (244) 457 105 1,636 496 581 2,297
Assets 97 160 – 87 391 161 1,493 226 395 3,010
Liabilities (247) (39) (489) (134) 40 100 – 130 (56) (695)
At 31 December 2011 (150) 121 (489) (47) 431 261 1,493 356 339 2,315
US deferred tax assets in BGUS and the US Branch
The deferred tax asset in BGUS and the US Branch includes amounts relating to tax losses of £135m (2011: £329m) and £834m (2011: £603m)
respectively, which first arose in 2007. In accordance with US tax rules tax losses can be carried forward and offset against profits for a period of 20
years and therefore any unused tax losses may begin to expire in 2028. The remaining balance primarily relates to temporary differences which are
not time limited. The deferred tax asset for the US Branch has been measured using a marginal tax rate being the excess of the US tax rate (a
combination of Federal, City and State taxes) over the UK statutory rate.
BGUS returned to profitability in 2012, primarily driven by Barclays Capital Inc., its US Broker Dealer, with tax losses expected to be fully utilised in
2013. A 20% reduction in forecasted profit would not extend the recovery period. The assumptions used in the profit forecasts do not include any
incremental tax planning strategies.
The tax losses in the US Branch are projected to be fully utilised by 2018, based on profit forecasts covering the period from 2013 to 2015, with no
profit growth assumed after 2015. A 20% reduction in forecasted profit would extend the recovery period by 2 years to 2020. The assumptions
used in the profit forecasts do not include any incremental tax planning strategies.
Spain deferred tax asset
The deferred tax asset in Spain includes £322m (2011: £417m) relating to tax losses incurred from 2010 to 2012. In accordance with Spanish tax
rules tax losses can be carried forward and offset against profits for a period of 18 years. The remaining balance primarily relates to temporary
differences which are not time limited. The asset has reduced to £602m (2011: £696m) reflecting a lower anticipated tax recovery rate.
The 2010 to 2012 tax losses are expected to be fully utilised by 2023. Additional losses are anticipated to arise in 2013, partly relating to
restructuring costs. The recoverability of the deferred tax asset has been determined using business profit forecasts covering the period from 2013
to 2016, with a subsequent annual growth rate of 2% p.a. A 20% reduction in forecast profits for 2016 and each subsequent year would extend
the recovery period of the tax losses by two years to 2025. A reduction in profits of more than this may result in a partial impairment of the
deferred tax asset depending upon the timing of the reversal of deductible temporary differences. The forecast assumptions do not include any
incremental tax planning strategies.
Other deferred tax assets
The deferred tax asset of £377m (2011: £571m) in other entities includes £55m (2011: £144m) relating to tax losses carried forward. Entities
which have suffered a loss in either the current or prior year have a total deferred tax asset of £135m (2011: £189m) relating to tax losses carried
forward and temporary differences. Recognition is based on profit forecasts which indicate that it is probable that the entities will have future
taxable profits against which the losses and temporary differences can be utilised. There is no net deferred tax asset in the UK.
barclays.com/annualreport Barclays PLC Annual Report 2012 I 249