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14 Deferred income tax

14 Deferred income tax

All figures in £ millions	2005	2004	2003
Deferred tax assets
Deferred tax asset to be recovered after more than 12 months	343	318	313
Deferred tax asset to be recovered within 12 months	42	41	29
Total	385	359	342
Deferred tax liabilities
Deferred tax liability to be settled after more than 12 months	(204)	(139)	(140)
Deferred tax liability to be settled within 12 months	-	-	-
Total	(204)	(139)	(140)
Net deferred tax	181	220	202

Deferred income tax assets and liabilities may be offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The Group has unprovided deferred tax assets at 31 December 2005 in respect of UK losses (£32m) and US losses (£37m) and has not recognised a deferred tax asset on the net pension deficit on the basis that it is not sufficiently certain that suitable future profits will arise against which to offset the liability. The related unprovided deferred tax asset is £96m.

The recognition of the deferred tax assets is supported by management's forecasts of the future profitability of the relevant business units.

The gross movement on the deferred income tax account is as follows:

All figures in £ millions	2005	2004	2003
At beginning of year	220	202	255
Transition adjustment on adoption of IAS 39	5	-	-
Exchange differences	21	(13)	(34)
Acquisition through business combination	(21)	-	(15)
Transfer between current and deferred taxation	-	41	25
Income statement charge (note 8)	(47)	(23)	(29)
Tax benefit to equity (note 8)	3	4	-
Transfer to non-current assets held for sale	-	9	-
At end of year	181	220	202

The movement in deferred income tax assets and liabilities during the year is as follows:

All figures in £ millions	Tax losses	Goodwill and intangibles	Other	Total
Deferred income tax assets
At 1 January 2003	131	57	186	374
Exchange differences	(16)	(4)	(22)	(42)
Transfer between current and deferred taxation	25	-	(17)	8
Income statement (charge)/release	(27)	(7)	36	2
At 31 December 2003	113	46	183	342
Exchange differences	(10)	(3)	(11)	(24)
Transfer between current and deferred taxation	41	-	(11)	30
Income statement release/(charge)	6	(6)	7	7
Tax benefit to equity	-	-	4	4
At 31 December 2004	150	37	172	359
Transition adjustment on adoption of IAS 39	-	-	5	5
Exchange differences	16	4	18	38
Acquisition through business combination	-	-	1	1
Transfer between current and deferred taxation	-	-	23	23
Income statement charge	(32)	(6)	(6)	(44)
Tax benefit to equity	-	-	3	3
At 31 December 2005	134	35	216	385
Other deferred tax assets include temporary differences on inventory, sales returns and other provisions.
All figures in £ millions		Goodwill and intangibles	Other	Total
Deferred income tax liabilities
At 1 January 2003		(25)	(94)	(119)
Exchange differences		-	8	8
Acquisition through business combination		(15)	-	(15)
Transfer between current and deferred taxation		-	17	17
Income statement charge		(19)	(12)	(31)
At 31 December 2003		(59)	(81)	(140)
Exchange differences		8	3	11
Transfer between current and deferred taxation		-	11	11
Income statement charge		(8)	(22)	(30)
Transfer to non-current assets held for sale		-	9	9
At 31 December 2004		(59)	(80)	(139)
Exchange differences		(8)	(9)	(17)
Acquisition through business combination		(24)	2	(22)
Transfer between current and deferred taxation		-	(23)	(23)
Income statement (charge)/release		(26)	23	(3)
At 31 December 2005		(117)	(87)	(204)

Other deferred tax liabilities include temporary differences on capital allowances and royalty advances.

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