62 | FINANCIAL STATEMENTS | Notes to the Consolidated Financial Statements


9. Income tax continued Deferred and current income tax related to items charged


or credited directly to Other Comprehensive Income or Equity: Fair value movements on financial investments


Net actuarial movements on defined benefit pension schemes Other overseas pension schemes movements


Adjustments in respect of Corporation Tax rate change


Tax (income)/expense recognised in Other Comprehensive Income Tax associated with purchase of NCI in F&C Partners LLP


Share-based payments Tax income recognised in Statement of Changes in Equity


2012 £m


(0.1) (2.1) 0.3 0.3


(1.6) 0.8


(0.6) (1.4)


(b) Factors affecting the tax income for the year A reconciliation between the actual tax income and the accounting loss multiplied by the Group’s domestic tax rate for the years ended 31 December 2012 and 2011 is as follows:


2012 £m


Loss before tax


At the Group’s statutory income tax rate of 24.5% (2011: 26.5%) Adjustments in respect of previous years Disallowed expenses Non-taxable income


Overseas tax at different rates Unrecognised losses Share-based payments


Disallowed distributions to LLP members


Non-taxable income attributable to LLP members Corporation Tax rate change


Tax income reported in the Income Statement Deferred tax assets and liabilities are shown in note 16.


(c) Effective rate of tax and factors affecting future tax charges Various announcements by the Chancellor of the Exchequer, since the Emergency Budget of 22 June 2010, mean that the UK rate of corporation tax is expected to reduce to 20% by 2015.


Two UK corporation tax rate changes were substantively enacted during 2012. The effect of the tax rate changes enacted during the year has been to decrease the net deferred tax assets of the Group by £0.2m comprising a £0.1m credit through the Income Statement and a £0.3m charge to equity reflecting the deferred tax that is expected to reverse through equity.


The current corporation tax rate of 24% became effective from 1 April 2012, leading to a statutory UK corporation tax rate of 24.5% for 2012 for the Group.


The 1% reduction to 23%, effective from 1 April 2013, was substantively enacted on 3 July 2012 and will lead to a statutory UK corporation tax rate of 23.25% for 2013.


No rate changes have been substantively enacted since the reporting date.


The Directors are of the view that, due to the significant level of estimation required, it is not yet possible to quantify the effect of the proposed 3% rate reduction to 20% in future years, although this will further reduce the Group’s current tax charge in future and impact the Group’s deferred tax assets/(liabilities) recognised in the Statement of Financial Position.


(2.5) (0.6)


(0.6) 0.8


(3.6) 0.3


(0.1) (1.6) 3.0


(3.0) (0.1)


(5.5)


2011 £m


(1.5) (0.4)


– 0.2


(5.3) 0.2 0.1 1.9 4.9


(4.9) (0.8)


(4.1)


2011 £m


(0.5) 1.0


(0.3) 0.3


0.5


(2.9) –


(2.4)


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