Aviva 2013 Annual Report Download - page 156

Aviva plc
Annual report and accounts 2013
154
Notes to the consolidated financial statements continued
14 – Tax continued
(c) Tax credited to equity
Tax credited directly to equity in the year amounted to £52 million (2012: £18 million). This comprises £22 million in respect of
coupon payments on the direct capital instruments and fixed rate tier 1 notes and £30 million in respect of the currency translation
reserve recycled to the income statement on the sale of Aviva USA Corporation.
(d) Tax reconciliation
The tax on the Group’s profit/(loss) before tax differs from the theoretical amount that would arise using the tax rate of the home
country of the Company as follows:
Shareholder
£m
Policyholder
£m
2013
Total
£m
Shareholder
£m
Policyholder
£m
Restated1
2012
Total
£m
Total profit/(loss) before tax 2,819 191 3,010 (2,521) 221 (2,300)
Tax calculated at standard UK corporation tax rate of 23.25% (2012: 24.5%) 656 44 700 (618) 54 (564)
Reconciling items
Different basis of tax
–
policyholders — 147 147 — 170 170
Adjustment to tax charge in respect of prior years (18) — (18) (20) — (20)
Non-assessable income and items not taxed at the full statutory rate (54) — (54) (86) — (86)
Non-taxable (profit)
/
loss on sale of subsidiaries and associates (154) — (154) 872 — 872
Disallowable expenses 98 — 98 418 — 418
Different local basis of tax on overseas profits 184 — 184 (142) (3) (145)
Change in future local statutory tax rates (9) — (9) (13) — (13)
Movement in deferred tax not recognised (21) — (21) (69) — (69)
Tax effect of (profit)/loss from associates and
j
oint ventures (10) — (10) 75 — 75
Other (4) — (4) (4) — (4)
Total tax charged to income statement 668 191 859 413 221 634
1 Restated for the adoption of revised IAS19. See note 1 for further details.
The tax charge attributable to policyholders' returns is removed from the Group’s total profit/(loss) before tax in arriving at the
Group’s profit/(loss) before tax attributable to shareholders' profits. As the net of tax profits attributable to with-profit and unit-
linked policyholders is zero, the Group’s pre-tax profit attributable to policyholders is an amount equal and opposite to the tax
charge attributable to policyholders included in the total tax charge. The difference between the policyholder tax charge and the
impact of this item in the tax reconciliation can be explained as follows:
2013
£m
2012
£m
Tax attributable to policyholder returns 191 221
UK corporation tax at a rate of 23.25% (2012: 24.5%) in respect of the policyholder tax deduction (44) (54)
Different local basis of tax of overseas profits — 3
Different basis of tax
–
policyholders per tax reconciliation 147 170
The UK corporation tax rate reduced to 23% from 1 April 2013. Legislation was substantively enacted in July 2013 to reduce the
main rate of UK corporation tax to 21% from 1 April 2014, with a further reduction to 20% from 1 April 2015. The 20% rate has
been used in the calculation of the UK’s deferred tax assets and liabilities as at 31 December 2013.