Aviva 2013 Annual Report Download - page 204

Aviva plc
Annual report and accounts 2013
202
Notes to the consolidated financial statements continued
47 – Tax assets and liabilities
This note analyses the tax assets and liabilities that appear in the statement of financial position and explains the movements in
these balances in the year.
(a) Current tax
Current tax assets recoverable and liabilities payable in more than one year are £42 million and £1 million (2012: £37 million and
£8 million), respectively.
(b) Deferred tax
(i) The balances at 31 December comprise:
2013
£m
2012
£m
Deferred tax assets 252 220
Deferred tax liabilities (564) (1,227)
Net deferred tax liability (312) (1,007)
Less: Amounts classified as held for sale (7) 648
(319) (359)
Amounts classified as held for sale include £8 million of deferred tax assets (2012: £32 million) and £1 million of deferred tax
liabilities (2012: £680 million).
(ii) The net deferred tax liability arises on the following items:
2013
£m
2012
£m
Long-term business technical provisions and other insurance items 1,276 2,067
Deferred acquisition costs (220) (681)
Unrealised gains on investments (1,856) (2,869)
Pensions and other post-retirement obligations (78) (135)
Unused losses and tax credits 296 535
Subsidiaries, associates and
j
oint ventures (8) (10)
Intangibles and additional value of in-force long-term business (190) (363)
Provisions and other temporary differences 468 449
Net deferred tax liability (312) (1,007)
Less: Amounts classified as held for sale (7) 648
(319) (359)
(iii) The movement in the net deferred tax liability was as follows:
2013
£m
Restated
2012
£m
Net liability at 1 January (1,007) (933)
Acquisition and disposal of subsidiaries1 682 —
Amounts charged to income statement (note 14(a)) (251) (141)
Amounts credited to other comprehensive income (note 14(b)) 271 43
Foreign exchange rate movements (8) 27
Other movements 1 (3)
Net liability at 31 December (312) (1,007)
1 Disposals include the disposal of the US business in 2013 £689 million
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the
temporary differences can be utilised. In countries where there is a history of tax losses, deferred tax assets are only recognised
in excess of deferred tax liabilities if there is convincing evidence that future profits will be available. Where this is the case, the
directors have relied on business plans supporting future profits.
The Group has unrecognised tax losses and other temporary differences of £777 million (2012: £1,005 million) to carry forward
against future taxable income of the necessary category in the companies concerned. Of these, trading losses of £79 million will
expire within the next 20 years. The remaining losses have no expiry date.
In addition, the Group has unrecognised capital losses of £438 million (2012: £652 million). These have no expiry date.
There are no temporary differences in respect of unremitted overseas retained earnings for which deferred tax liabilities have
not been recognised at 31 December 2013 (2012: £nil).