YOU ARE HERE:

Notes to the consolidated financial statements

For the year ended 31 December 2009

D: Other income statement notes

D1: Income tax expense/(credit)

(a) Analysis of total income tax expense/(credit)

 
 
£m
 
Year ended
31 December
2009
Year ended
31 December
2008
Current tax
United Kingdom tax
Corporation tax
46
93
Double tax relief
-
(145)
Overseas tax
South Africa
257
264
United States
-
4
Europe
49
68
Secondary Tax on Companies (STC)
13
22
Prior year adjustments
14
1
Total current tax
379
307
Deferred tax
Origination and reversal of temporary differences
45
(548)
Changes in tax rates/bases
-
(1)
Write down/recognition of deferred tax assets
(59)
154
Total deferred tax
(14)
(395)
Total income tax expense/(credit)
365
(88)

(b) Reconciliation of total income tax expense/(credit)

 
 
£m
 
Year ended
31 December
2009
Year ended
31 December
2008
Profit before tax
247
595
Tax at standard rate of 28% (2008: 28.5%)
69
169
Different tax rate or basis on overseas operations
(9)
(23)
Untaxed and low taxed income
(86)
(218)
Disallowable expenses
180
8
Net movement on deferred tax assets not recognised
83
123
Effect on deferred tax of changes in tax rates
(2)
(5)
STC
19
53
Income tax attributable to policyholder returns
142
(169)
Other
(31)
(26)
Total income tax expense/(credit)
365
(88)

(c) Income tax relating to components of other comprehensive income

 
£m
 
Year ended
31 December
2009
Year ended
31 December
2008
Fair value gains/(losses)
428
(383)
Shadow accounting
(18)
16
Currency translation differences/exchange differences on translating foreign operations
-
13
Other
(13)
(12)
Income tax expense/(credit) relating to components of other comprehensive income
397
(366)

(d) Income tax on adjusted operating profit

 
 
£m
 
Year ended
31 December
2009
Year ended
31 December
2008
Income tax expense/(credit)
365
(88)
Tax on adjusting items
Impact of acquisition accounting
40
46
Profit on disposal of subsidiaries, associated undertakings and strategic investments
(2)
12
Short-term fluctuations in investment return
83
35
Income tax attributable to policyholders returns
(192)
236
Tax on dividends declared to holders of perpetual preferred callable securities recognised in equity
(13)
(12)
Fair value gains and losses on group debt instruments
-
(143)
Tax on non-core operations
11
-
Income tax on adjusted operating profit
292
86