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Report and accounts 2006
| 2006 £m |
2005 (as restated)* £m |
|
|---|---|---|
| Current tax | ||
| Current year | (3) | (3) |
| Adjustments in respect of previous periods | - | - |
| Total | (3) | (3) |
| Deferred tax | ||
| Deferred income tax | - | - |
| Total income taxes in the income statement | (3) | (3) |
* As restated for the adoption of IFRS.
The tax charge for the period is different to the standard rate of corporation tax in the UK, currently 30% (2005: 30%), and the differences are explained below:
Reconciliation of income taxes in the income statement
| 2006 £m |
2005 (as restated)* £m |
|
|---|---|---|
| Profit before tax | 855 | 501 |
| Profit before tax multiplied by rate of corporation tax in the UK of 30% (2005: 30%) | (256) | (150) |
| Effects of: | ||
| Permanent differences | 6 | 3 |
| Short-term timing differences | 1 | (2) |
| Current period unutilised tax losses | (7) | (2) |
| Non-taxable UK dividend income | 20 | 31 |
| Repatriated profits of overseas subsidiaries | (1) | (7) |
| Foreign tax | (3) | (1) |
| Foreign tax credits available for double tax relief | 1 | 1 |
| Realised profits, changes in fair value and impairment losses not taxable | 236 | 124 |
| Adjustments to tax in respect of prior periods | - | - |
| Total income taxes in the income statement | (3) | (3) |
* As restated for the adoption of IFRS.
The Group's realised profits, fair value adjustments and impairment losses are primarily included in the Company, the affairs of which are directed so as to allow it to be approved as an investment trust. An investment trust is exempt from tax on capital gains, therefore the Group's capital return will be largely non taxable.
| Consolidated balance sheet 2006 £m |
Consolidated balance sheet 2005 (as restated)* £m |
Consolidated income statement 2006 £m |
Consolidated income statement 2005 (as restated)* £m |
|
|---|---|---|---|---|
| Deferred income tax assets | ||||
| Tax losses | 2 | 2 | - | (1) |
| Gross deferred income tax assets | 2 | 2 | ||
| Deferred income tax liabilities | ||||
| Unrealised valuation surpluses on investments | - | (1) | 1 | - |
| Income in accounts taxable in the future | (3) | (2) | (1) | 1 |
| Gross deferred income tax liabilities | (3) | (3) | ||
| Deferred tax income tax charge | - | - |
* As restated for the adoption of IFRS.
At 31 March 2006 the Group had tax losses carried forward of £560 million (2005: £550 million). It is unlikely that the Group will generate sufficient taxable profits in the future to utilise these amounts and therefore no deferred tax asset has been recognised. These tax losses are available to carry forward indefinitely.