Schroders plc notes to the accounts
for the year ended 31 December 2007
51. Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 28 per cent., reflecting the rate expected to be applicable at the time the net deferred tax liability is realised (2006: 30 per cent.).
The movement on the net deferred tax account is as shown below:
| 2007 £mn |
2006 £mn |
|
|---|---|---|
| At 1 January | 5.9 | 8.8 |
| Income statement expense | (4.4) | (1.6) |
| Charge taken to equity | (1.2) | (1.3) |
| Effect of changes in UK tax rates - income statement expense | (0.3) | - |
| Effect of changes in UK tax rates - taken to equity | (0.2) | - |
| At 31 December | (0.2) | 5.9 |
| (a) Deferred tax assets | Temporary differences including bonuses and pension costs £mn |
Tax losses carried forward £mn |
Total £mn |
|---|---|---|---|
| At 1 January 2007 | 4.7 | 1.2 | 5.9 |
| Income statement credit/(expense) | (5.1) | 0.3 | (4.8) |
| Charge taken to equity | (1.3) | - | (1.3) |
| Transfer to deferred tax liabilities | 1.7 | - | 1.7 |
| At 31 December 2007 | - | 1.5 | 1.5 |
| At 1 January 2006 | 9.0 | 2.4 | 11.4 |
| Income statement expense | (0.5) | (1.4) | (1.9) |
| Charge taken to equity | (1.3) | - | (1.3) |
| Transfer from deferred tax liabilities | (2.6) | - | (2.6) |
| Prior year adjustments | 0.1 | 0.2 | 0.3 |
| At 31 December 2006 | 4.7 | 1.2 | 5.9 |
| (b) Deferred tax liabilities | Temporary differences including bonuses £mn |
Total £mn |
|---|---|---|
| At 1 January 2007 | - | - |
| Transfer from deferred tax assets | (1.7) | (1.7) |
| At 31 December 2007 | (1.7) | (1.7) |
| At 1 January 2006 | (2.6) | (2.6) |
| Transfer to deferred tax assets | 2.6 | 2.6 |
| At 31 December 2006 | - | - |
All of the deferred tax assets were available for offset against deferred tax liabilities. The net deferred tax provision at 31 December 2007 was a liability £0.2 million (2006: asset £5.9 million).