Financial Statements

Notes to the consolidated accounts

24. Deferred tax assets and liabilities

24 (a) Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

	2007			2006
	Assets £m	Liabilities £m	Net £m	Assets £m	Liabilities £m	Net £m
Property and equipment	46	-	46	40	-	40
Intangible assets	-	(161)	(161)	-	(176)	(176)
Unrealised gains on investments	-	(161)	(161)	-	(166)	(166)
Employee benefits	20	-	20	37	-	37
Deferred acquisition costs	-	(10)	(10)	-	(73)	(73)
Tax value of recognised tax losses	11	-	11	9	-	9
Short-term temporary differences	5	-	5	11	-	11
Unremitted profits of subsidiary	-	(24)	(24)	-	-	-
Net deferred tax assets/(liabilities)	82	(356)	(274)	97	(415)	(318)

Of the deferred tax assets above, £55m is attributable to Lombard and is presented gross on the balance sheet.

24 (b) Movement in temporary differences during the year

	1 January 2007 £m	Recognised in income £m	Recognised in equity £m	Acquired in year £m	31 December 2007 £m
Property and equipment	40	6	-	-	46
Intangible assets	(176)	30	(6)	(9)	(161)
Unrealised gains on investments	(166)	4	1	-	(161)
Employee benefits	37	(5)	(12)	-	20
Deferred acquisition costs	(73)	63	-	-	(10)
Tax value of recognised tax losses	9	2	-	-	11
Short-term temporary differences	11	(6)	-	-	5
Unremitted profits of subsidiary	-	(24)	-	-	(24)
Net deferred tax (liabilities)/assets	(318)	70	(17)	(9)	(274)

	1 January 2006 £m	Recognised in income £m	Recognised in equity £m	Acquired in year £m	31 December 2006 £m
Property and equipment	26	14	-	-	40
Intangible assets	(223)	38	9	-	(176)
Unrealised gains on investments	(83)	(83)	-	-	(166)
Employee benefits	33	2	2	-	37
Deferred acquisition costs	(73)	-	-	-	(73)
Tax value of recognised tax losses	11	(2)	-	-	9
Short-term temporary differences	21	(10)	-	-	11
Net deferred tax (liabilities)/assets	(288)	(41)	11	-	(318)

24 (c) Unrecognised deferred tax assets and liabilities

Deferred tax assets/(liabilities) have not been recognised in respect of the following items:

	2007 £m	2006 £m
Assets
Tax losses	66	93
Total assets	66	93
Liabilities
Distributable profits of subsidiary	-	(11)
Total liabilities	-	(11)
Net unrecognised deferred tax assets	66	82

A deferred tax asset has not been recognised in respect of these losses as it is probable that there will be insufficient suitable profits emerging in future periods against which to relieve them.