Notes to the consolidated financial statements – analysis of items in the primary statements
16. Deferred tax assets and liabilities
The following are the major deferred tax assets and liabilities recognised, and the movements thereon, during the current and prior reporting periods:
Deferred tax (assets)/liabilities
| Accelerated tax depreciation £m |
Share-based payments £m |
Pensions and other post-retirement benefits £m |
Financial instruments £m |
Other net temporary differences £m |
Total £m |
|
|---|---|---|---|---|---|---|
| Deferred tax assets at 31 March 2006 | (5) | (28) | (397) | (6) | (835) | (1,271) |
| Deferred tax liabilities at 31 March 2006 | 3,126 | – | – | 20 | 127 | 3,273 |
| At 1 April 2006 | 3,121 | (28) | (397) | 14 | (708) | 2,002 |
| Exchange adjustments | (90) | – | 13 | – | 91 | 14 |
| Charged/(credited) to income statement (i) | 321 | 9 | 82 | (9) | 54 | 457 |
| (Credited)/charged to equity | – | (11) | 70 | 11 | – | 70 |
| Acquisition of subsidiary undertakings | – | – | 2 | – | (13) | (11) |
| Reclassification to liabilities of businesses held for sale | (129) | 1 | 1 | – | 3 | (124) |
| Other | 63 | – | (238) | 5 | 151 | (19) |
| At 31 March 2007 | 3,286 | (29) | (467) | 21 | (422) | 2,389 |
| Deferred tax assets at 31 March 2007 | (4) | (29) | (532) | (9) | (452) | (1,026) |
| Deferred tax liabilities at 31 March 2007 | 3,290 | – | 65 | 30 | 30 | 3,415 |
| At 1 April 2007 | 3,286 | (29) | (467) | 21 | (422) | 2,389 |
| Exchange adjustments | (1) | – | – | – | 11 | 10 |
| Charged/(credited) to income statement (i) | 123 | – | (9) | (2) | 196 | 308 |
| Charged/(credited) to equity | – | 12 | 98 | (4) | – | 106 |
| Acquisition of subsidiary undertakings (note 28) | 289 | – | (60) | (3) | 365 | 591 |
| Other | (2) | 1 | 2 | – | 2 | 3 |
| At 31 March 2008 | 3,695 | (16) | (436) | 12 | 152 | 3,407 |
| Deferred tax assets at 31 March 2008 | (2) | (16) | (685) | (17) | (322) | (1,042) |
| Deferred tax liabilities at 31 March 2008 | 3,697 | – | 249 | 29 | 474 | 4,449 |
| 3,695 | (16) | (436) | 12 | 152 | 3,407 |
(i) Deferred tax charged to the income statement includes a £1m tax credit (2007: £14m tax charge) reported within profit for the year from discontinued operations.
Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is intention to settle the balances net. As at 31 March 2008 and 2007 the deferred tax balances are liabilities after offset.
At the balance sheet date there were no material current deferred tax assets or liabilities (2007: £nil).
Deferred tax assets in respect of capital losses and non-trade deficits have not been recognised as their future recovery is uncertain or not currently anticipated. The deferred tax assets not recognised are as follows:
| 2008 £m |
2007 £m |
|
|---|---|---|
| Capital losses | 220 | 216 |
| Non-trade deficits | 10 | 203 |
| Trading losses | – | 3 |
The capital losses and non-trade deficits are available to carry forward indefinitely. The capital losses can be offset against specific types of future capital gains and non-trade deficits can be offset against specific future non-trade profits.
The aggregate amount of temporary differences associated with the unremitted earnings of overseas subsidiaries and joint ventures for which deferred tax liabilities have not been recognised at the balance sheet date is approximately £930m (2007: £811m). No liability is recognised in respect of the differences because the Company and its subsidiaries are in a position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future.