Notes to the Group Financial Statements
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| 7. Taxation | ||
| Analysis of tax charge on continuing operations in the period: | 2007 $m |
2006 $m |
| Current tax | ||
| UK Corporation tax on profits of the year | 89 | 121 |
| Adjustments to tax charge in respect of previous periods | (16) | (9) |
| Exceptional tax credit | – | (20) |
| Foreign tax | 119 | 90 |
| Adjustments to tax charge in respect of previous periods | (1) | 4 |
| Total current tax | 191 | 186 |
| Deferred tax (Note 16): | ||
| Origination and reversal of temporary differences | 4 | 9 |
| Adjustments to tax charge in respect of previous periods | (4) | (1) |
| Total tax charge | 191 | 194 |
| Tax on items charged to equity: | 2007 $m |
2006 $m |
| Current tax | 21 | – |
| Deferred tax | 15 | 10 |
| 36 | 10 | |
| Effective tax rate | 14.7% | 18.0% |
| Effective tax rate excluding exceptional items | 14.7% | 20.2% |
| UK nominal corporation tax rate | 30.0% | 30.0% |
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| The tax on the Group’s total profit before tax is lower (2006: lower) than the amount that would arise using the theoretical effective UK tax rate applicable to profits of the consolidated companies, as follows: | ||||
| 2007 $m |
2006 $m |
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| Profit before tax from continuing operations | 1,301 | 1,154 | ||
| Profit before tax from discontinued operations | 263 | 82 | ||
| 1,564 | 1,236 | |||
| Theoretical tax charge at UK rate (30%) | 469 | 371 | ||
| Effect of: | ||||
| Effect of overseas rates compared to UK | (163) | (119) | ||
| Exceptional items | 9 | (21) | ||
| Share-based payments | (2) | (7) | ||
| Currency translation differences | 1 | 2 | ||
| Adjustments to tax charge in respect of previous periods | (22) | (4) | ||
| Associates and joint ventures accounted for net of tax | (3) | (10) | ||
| Other | (9) | 10 | ||
| (189) | (149) | |||
| Total tax charge | 280 | 222 | ||
| Allocated to: | ||||
| Continuing operations | 191 | 194 | ||
| Discontinued operations | 89 | 28 | ||