Aviva 2007 Annual Report Download - page 200
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44 – Tax assets and liabilities
This note analyses the tax assets and liabilities that appear in the balance sheet, and explains the movements in these
balances in the year.
(a) General
Current tax assets and liabilities recoverable or payable in more than one year are £223 million and £769 million
(2006: £81 million and £842 million) respectively.
(b) Deferred tax
(i) The balances at 31 December comprise:
2007 2006
£m £m
Deferred tax assets 590 1,199
Deferred tax liabilities (2,529) (3,077)
Net deferred tax liability (1,939) (1,878)
(ii) The net deferred tax liability arises on the following items:
2007 2006
£m £m
Long-term business technical provisions and other insurance items 905 1,247
Deferred acquisition costs (170) (126)
Unrealised gains on investments (1,577) (2,379)
Pensions and other post-retirement obligations 79 344
Unused losses and tax credits 465 250
Subsidiaries, associates and joint ventures (194) (227)
Intangibles and additional value of in-force long-term business (811) (738)
Provisions and other temporary differences (636) (249)
Net deferred tax liability (1,939) (1,878)
(iii) The movement in the net deferred tax liability was as follows:
2007 2006
£m £m
Net liability at 1 January (1,878) (1,440)
Acquisition of subsidiaries (185) (182)
Amounts credited/(charged) to profit (note 13a) 442 (199)
Amounts charged to equity (note 13b) (198) (14)
Exchange differences (37) 16
Other movements (83) (59)
Net liability at 31 December (1,939) (1,878)
The Group has unrecognised tax losses of £1,066 million (2006: £1,746 million) to carry forward against future taxable
income of the necessary category in the companies concerned. None of these tax losses will expire in the next 20 years
(2006: £26 million within ten years and £26 million within 15-20 years). The remaining losses have no expiry date.
In addition, the Group has an unrecognised capital loss of £409 million (2006: £468 million). This tax loss can be offset
against future capital gains and has no expiry date.
Deferred tax liabilities of £666 million (2006: £527 million) have not been established for temporary differences associated
with investments in subsidiaries and interests in joint ventures and associates (including tax payable on remittance of
overseas retained earnings) because the Group can control the timing of the reversal of these differences and it is probable
that they will not reverse in the foreseeable future. Such unremitted earnings totalled £4,258 million at 31 December 2007
(2006: £2,552 million).
Aviva plc
Annual Report and
Accounts 2007
196
Financial
statements
Notes to the consolidated financial statements continued