Aviva 2006 Annual Report Download - page 219

Overview Business review Governance Financial statements Other information
Aviva plc
Annual Report and Accounts 2006 215
C – Operating expenses continued
(iii) Pension costs
The Company is one of a number of UK companies being charged for its employees participating in the Aviva Staff Pension Scheme,
and its contributions are affected by the financial position of the scheme. There is no contractual agreement or policy for charging the
net defined benefit cost for this scheme across the participating Group entities but, instead, this cost is recognised in the financial
statements of the main UK employing company. The Company therefore recognises a pension expense equal to its contributions payable
in the year for its staff, together with the service cost of any unfunded benefits, within staff costs above.
Full disclosure on the Group’s pension schemes is given in note 42.
(iv) Equity compensation plans
All transactions in the Group’s equity compensation plans involve options and awards for ordinary shares of the Company. Full disclosure
of these plans is given in note 28. The cost of such options and awards is borne by all participating businesses and, where relevant,
the Company bears an appropriate charge. As the majority of the charge to the Company relates to directors’ options and awards,
for which full disclosure is made in the Directors’ remuneration report, no further disclosure is given here on the grounds of immateriality.
D – Ta x
(i) Tax credited to income statement:
2006 2005
£m£m
Current tax:
For this year 438 29
Prior year adjustments 76 30
Total current tax 514 59
Deferred tax:
Origination and reversal of timing differences 7(5)
Total deferred tax 7(5)
Total tax credited to income statement 521 54
(ii) Tax reconciliation
The tax on the Company’s (loss)/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
(Loss)/ profit beforetax (545) 1,293
Tax calculated at standard UK corporation tax rate of 30% (2005: 30%) 163 (388)
Adjustment to tax charge in respect of prior years 76 30
Non-assessable dividends 259 513
Disallowable expenses (12) (23)
Non-taxable profit on sale of subsidiary 28 –
Deferred tax asset not recognised 7(55)
Other –(23)
Total tax credited to income statement 521 54
(iii) The net deferred tax asset comprises:
2006 2005
£m £m
Provisions and other temporary differences 92
Net deferred tax asset 92