Notes to the consolidated financial 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 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)* | 389 | – | (250) | (1) | 305 | 443 | |||
| Other | (2) | 1 | 2 | – | 2 | 3 | |||
| At 31 March 2008* | 3,795 | (16) | (626) | 14 | 92 | 3,259 | |||
| Deferred tax assets at 31 March 2008* | (2) | (16) | (875) | (17) | (382) | (1,292) | |||
| Deferred tax liabilities at 31 March 2008* | 3,797 | – | 249 | 31 | 474 | 4,551 | |||
| At 1 April 2008* | 3,795 | (16) | (626) | 14 | 92 | 3,259 | |||
| Exchange adjustments | 471 | – | (303) | 3 | 7 | 178 | |||
| (Credited)/charged to income statement (i) | (257) | (1) | 219 | 5 | (184) | (218) | |||
| Charged/(credited) to equity | – | 3 | (678) | (26) | – | (701) | |||
| Other | 288 | 1 | – | – | (283) | 6 | |||
| At 31 March 2009 | 4,297 | (13) | (1,388) | (4) | (368) | 2,524 | |||
| Deferred tax assets at 31 March 2009 | (2) | (13) | (1,457) | (33) | (504) | (2,009) | |||
| Deferred tax liabilities at 31 March 2009 | 4,299 | – | 69 | 29 | 136 | 4,533 | |||
| 4,297 | (13) | (1,388) | (4) | (368) | 2,524 |
- *
- Comparatives have been restated for the finalisation of the fair value exercise on the acquisition of KeySpan Corporation (see note 28)
- (i)
- Deferred tax credited to the income statement includes a £564m tax credit (2008: £1m tax credit) 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. The following is an analysis of the deferred tax balances (after offset) for balance sheet purposes:
| 2009 £m |
2008* £m |
||||
|---|---|---|---|---|---|
| Deferred tax liabilities | 2,661 | 3,259 | |||
| Deferred tax assets | (137) | – | |||
| 2,524 | 3,259 |
- *
- Comparatives have been restated for the finalisation of the fair value exercise on the acquisition of KeySpan Corporation (see note 28)
At the balance sheet date there were no material current deferred tax assets or liabilities (2008: £nil).
Deferred tax assets in respect of capital losses, trading 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:
| 2009 £m |
2008 £m |
||||
|---|---|---|---|---|---|
| Capital losses | 214 | 220 | |||
| Non-trade deficits | 2 | 10 | |||
| Trading losses | 4 | – |
The trading losses arise overseas and are available to carry forward for nine years and set off against future overseas profits and will expire on 31 March 2017. In addition, the capital losses and non-trade deficits arise in the UK and are available to carry forward indefinitely. However, the capital losses can only be offset against specific types of future capital gains and non-trade deficits 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 £1,137m (2008: £930m). 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.