Barclays 2004 Annual Report Download - page 162

Notes to the accounts
For the year ended 31st December 2004
27 Deferred tax (continued)
No tax has been calculated on capital gains (2003: £nil) that might arise on the disposal of properties at their balance sheet amounts. The
aggregate disposal of the property portfolio would not be expected to give rise to a significant gain or loss. Tax would become payable only
if property were sold without it being possible to claim rollover relief. At present, it is not envisaged that any tax will become payable in the
foreseeable future.
The fair values of certain derivatives and financial instruments are disclosed in Note 37. For trading balances, where fair values are recognised
in the financial statements and mark to market movements included in the profit and loss account, the gains and losses are subject to current
tax and no deferred tax arises. In the case of derivatives used for asset and liability management purposes, tax arises when the gain or loss is
recognised in the profit and loss account at the same time as the hedged item. Where fair values are disclosed but not recognised, tax would arise
if the assets were sold at their fair value. Tax of £759m (2003: £900m) would become payable on the sale of the non-trading financial assets for
which a valuation has been given.
Deferred tax assets have not been recognised on tax losses to the extent that they are not regarded as recoverable in the foreseeable future.
The unrecognised asset of £5m (2003: £4m) would be regarded as recoverable to the extent that, on the basis of all available evidence, it was
more likely than not that there would be suitable taxable profits from which the tax losses could be deducted.
No deferred tax is recognised on the unremitted earnings of overseas subsidiary undertakings, associated undertakings and joint ventures.
Such earnings form part of the balance sheet value and are therefore included in the deferred tax of subsidiaries.
28 Other provisions for liabilities and charges
Employee
pension and Redundancy
post-retirement Customer and
benefit Onerous loyalty restruct- Sundry
contributions contracts provisions uring provisions Total
£m £m £m £m £m £m
At 1st January 2004 65 23 32 71 178 369
Acquisitions and disposals of Group undertakings (3) ––––(3)
Exchange (5) 4 – (3) (6) (10)
Additions 135 25 12 202 187 561
Amounts used (28) (11) (32) (161) (98) (330)
Unused amounts reversed (60) (3) – (12) (46) (121)
Amortisation of discount –1–––1
104 39 12 97 215 467
At 1st January 2003 180 26 55 113 112 486
Acquisitions and disposals of Group undertakings 8 – – – 1 9
Exchange (1) 4 – 4 – 7
Additions 30 7 11 235 121 404
Amounts used (50) (10) (34) (245) (35) (374)
Unused amounts reversed (102) (5) – (36) (21) (164)
Amortisation of discount – 1 – – – 1
65 23 32 71 178 369
Customer loyalty provisions are made with respect to anticipated future claims on redemption under the Group’s customer loyalty bonus
schemes. Sundry provisions are made with respect to commission clawbacks, warranties, cost of customer redress and litigation claims.
The Group has a restructuring programme, largely focused on activities within the UK, which involves the reshaping of the Group’s operations
through the centralisation of core processes, application of new technologies, and reduction of workforce. It is anticipated that the majority of
remaining liabilities and charges will be utilised in 2005.
160