Annual Report 2012 - Development Securities PLC

Financial Statements
19 Deferred income tax
The following are the deferred income tax liabilities and assets and movements thereon recognised by the Group during the current and previous financial
period. The UK corporation tax rate decreased on 1st April 2012 from 26.0 per cent to 24.0 per cent. Deferred income tax is calculated on the temporary
differences under the liability method using a tax rate of 25.0 per cent (31st December 2010: 27.0 per cent).
At 1st January
29th February
2012
£’000
31st December
2010
£’000
Charge for the period in the Statement of Comprehensive Income (note 7) 1,067 761
Credited directly to equity (1,067) (761)
— —
Revaluation of property
29th February
2012
£’000
31st December
2010
£’000
Deferred income tax liabilities recognised:
At 1st January 5,507 3,912
(Charged)/credited to the Statement of Comprehensive Income (2,266) 1,595
3,241 5,507
Deferred income tax assets recognised:
Decelerated
capital
allowances
£’000
Provisions
£’000
Tax losses
£’000
At 1st January 2010 (492) (136) (3,327) 43 (3,912)
Charged/(credited) to the Statement of Comprehensive Income 78 (222) (690) — (834)
Credited directly to equity — — (761) — (761)
At 31st December 2010 (414) (358) (4,778) 43 (5,507)
(Credited)/charged to the Statement of Comprehensive Income (288) (22) 3,686 (43) 3,333
Credited directly to equity — — (1,067) — (1,067)
At 29th February 2012 (702) (380) (2,159) — (3,241)
29th February
2012
Net deferred income tax asset:
£’000
At 29th February 2012 —
Deferred income tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances
net. Deferred income tax assets arising from the Group’s trading and capital losses are recognised on the basis that there will be sufficient profits in the
foreseeable future to utilise such losses. The Group has not recognised deferred income tax assets of £12,105,000 (31st December 2010: £11,839,000) in
respect of losses amounting to £48,422,000 (31st December 2010: £43,848,000) that can be carried forward against future taxable income. The proposed
reductions of the main rate of corporation tax by 1.0 per cent per annum to 22.0 per cent by 1st April 2014 are expected to be enacted separately each year.
The overall effect of the further changes from 26.0 per cent to 22.0 per cent, if these applied to the deferred tax balance at 29th February 2012, would be
to reduce the net deferred income tax asset by £nil.
Movements in deferred income tax assets and liabilities (prior to the offsetting of balances) are shown above.
Other
£’000
Total
£’000
Development Securities PLC / Annual Report 2012 99