Aviva 2014 Annual Report Download - page 208

Aviva plc Annual report and accounts 2014
Notes to the consolidated financial statements continued
204
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 £15 million and £13 million (2013: £42 million and
£1 million), respectively.
(b) Deferred tax
(i) The balances at 31 December comprise:
2014
£m
2013
£m
Deferred tax assets 76 252
Deferred tax liabilities (1,091) (564)
Net deferred tax liability (1,015) (312)
Less: Amounts classified as held for sale
—
(7)
(1,015) (319)
(ii) The net deferred tax liability arises on the following items:
2014
£m
2013
£m
Long-term business technical provisions and other insurance items 2,263 1,276
Deferred acquisition costs (251) (220)
Unrealised gains on investments (2,885) (1,856)
Pensions and other post-retirement obligations (499) (78)
Unused losses and tax credits 227 296
Subsidiaries, associates and joint ventures (12) (8)
Intangibles and additional value of in-force long-term business (170) (190)
Provisions and other temporary differences 312 468
Net deferred tax liability (1,015) (312)
Less: Amounts classified as held for sale —(7)
(1,015) (319)
(iii) The movement in the net deferred tax liability was as follows:
2014
£m
2013
£m
Net liability at 1 January (312) (1,007)
Acquisition and disposal of subsidiaries1 5682
Amounts charged to income statement (note 14a) (291) (251)
Amounts (charged)/credited to other comprehensive income (note 14b) (445) 271
Foreign exchange rate movements 28 (8)
Other movements
—
1
Net liability at 31 December (1,015) (312)
1 Disposals in 2013 mainly relate to the disposal of US Life of £720 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 £694 million (2013: £777 million) to carry forward
against future taxable income of the necessary category in the companies concerned. Of these, trading losses of £48 million will
expire within the next 20 years. The remaining losses have no expiry date.
In addition, the Group has unrecognised capital losses of £434 million (2013: £438 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 2014 (2013: £nil).
204 | Aviva plc Annual report and accounts 2014