Holiday Inn 2006 Annual Report Download - page 63

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Notes to the Group financial statements
7 Tax
2006 2005
Income tax £m £m
UK corporation tax at 30% (2005 30%):
Current period 16 11
Benefit of tax reliefs on which no deferred tax previously recognised (10) –
Adjustments in respect of prior periods (4) (6)
25
Foreign tax:
Current period 72 149
Benefit of tax reliefs on which no deferred tax previously recognised (1) (2)
Adjustments in respect of prior periods (94) (19)
(23) 128
Total current tax (21) 133
Deferred tax:
Origination and reversal of temporary differences 27 (3)
Changes in tax rates (4) (2)
Adjustments to estimated recoverable deferred tax assets (13) 1
Adjustments in respect of prior periods (24) (11)
Total deferred tax (14) (15)
Total income tax on profit for the year (35) 118
Further analysed as tax relating to:
Profit before special items 53 88
Special items (note 5):
Other operating income and expenses – gain on sale of investment 6–
Special tax credit* (100) (8)
Tax (credit)/charge (41) 80
Gain on disposal of assets 638
(35) 118
The total tax (credit)/charge can be further analysed as relating to:
Profit on continuing operations (50) 24
Profit on discontinued operations 956
Gain on disposal of assets 638
(35) 118
* Represents the release of provisions which are special by reason of their size or incidence relating to tax matters which have been settled or in respect of which
the relevant statutory limitation period has expired, together with, in 2006, a credit in respect of previously unrecognised losses.
2006 2005
Reconciliation of tax (credit)/charge on total profit, including gain on disposal of assets %%
UK corporation tax at standard rate 30.0 30.0
Permanent differences 3.7 1.3
Net effect of different rates of tax in overseas businesses 3.5 2.9
Effect of changes in tax rates (1.0) (0.3)
Benefit of tax reliefs on which no deferred tax previously recognised (3.0) (0.1)
Effect of adjustments to estimated recoverable deferred tax assets (0.2) 0.1
Adjustment to tax charge in respect of prior periods (6.9) (4.5)
Other 0.4 (0.1)
Special items and gain on disposal of assets (36.1) (10.7)
(9.6) 18.6
IHG Notes to the Group financial statements 61