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13. Deferred income tax
| All figures in £ millions | 2007 | 2006 |
|---|---|---|
| Deferred income tax assets | ||
| Deferred income tax assets to be recovered after more than 12 months | 262 | 288 |
| Deferred income tax assets to be recovered within 12 months | 66 | 129 |
| 328 | 417 | |
| Deferred income tax liabilities | ||
| Deferred income tax liabilities to be settled after more than 12 months | (287) | (245) |
| Deferred income tax liabilities to be settled within 12 months | – | – |
| (287) | (245) | |
| Net deferred income tax | 41 | 172 |
Deferred income tax assets to be recovered within 12 months relate to the utilisation of losses in the US.
Deferred income tax assets and liabilities may be offset when there is a legally enforceable right to offset current tax assets against current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The Group has unrecognised deferred income tax assets at 31 December 2007 in respect of UK losses of £34m (2006: £35m). None of these unrecognised deferred income tax assets have expiry dates associated with them.
The recognition of the deferred income tax assets is supported by management’s forecasts of the future profitability of the relevant business units.
The movement on the net deferred income tax account is as follows:
| All figures in £ millions | Notes | 2007 | 2006 |
|---|---|---|---|
| At beginning of year | 172 | 181 | |
| Exchange differences | (4) | (16) | |
| Income statement (charge)/benefit | 7 | (87) | 19 |
| Acquisition through business combination | 29 | (45) | (26) |
| Disposal through business disposal | 31 | 2 | – |
| Tax benefit to equity | 3 | 14 | |
| At end of year | 41 | 172 |
The movement in deferred income tax assets and liabilities during the year is as follows:
| All figures in £ millions | Capital losses |
Trading losses |
Goodwill and intangibles |
Returns provisions |
Other | Total |
|---|---|---|---|---|---|---|
| Deferred income tax asset | ||||||
| At 1 January 2006 | – | 134 | 35 | 83 | 133 | 385 |
| Exchange differences | – | (17) | (4) | (10) | (11) | (42) |
| Income statement benefit/(charge) | 76 | 12 | (6) | (7) | (12) | 63 |
| Tax benefit to equity | – | – | – | – | 11 | 11 |
| At 31 December 2006 | 76 | 129 | 25 | 66 | 121 | 417 |
| Exchange differences | – | (5) | – | (1) | (2) | (8) |
| Acquisition through business combination | – | 10 | – | – | 1 | 11 |
| Income statement (charge)/benefit | (76) | (47) | (5) | 14 | 19 | (95) |
| Tax benefit to equity | – | – | – | – | 3 | 3 |
| At 31 December 2007 | – | 87 | 20 | 79 | 142 | 328 |
Other deferred income tax assets include temporary differences on share-based payments, inventory, retirement benefit obligations and other provisions.
| All figures in £ millions | Goodwill and intangibles |
Other | Total |
|---|---|---|---|
| Deferred income tax liabilities | |||
| At 1 January 2006 | (117) | (87) | (204) |
| Exchange differences | 15 | 11 | 26 |
| Acquisition through business combination | (20) | (6) | (26) |
| Income statement charge | (27) | (17) | (44) |
| Tax benefit to equity | – | 3 | 3 |
| At 31 December 2006 | (149) | (96) | (245) |
| Exchange differences | 3 | 1 | 4 |
| Acquisition through business combination | (56) | – | (56) |
| Disposal through business disposal | – | 2 | 2 |
| Income statement (charge)/benefit | (12) | 20 | 8 |
| Tax benefit to equity | – | – | – |
| At 31 December 2007 | (214) | (73) | (287) |
Other deferred tax liabilities include temporary differences in respect of depreciation and royalty advances.