Preliminary results - 12 months ended 31 December 2006 01 March 2007

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13. Tax

(a) Tax charged to the income statement

	2006 £m	2005 £m
Current tax:
For the year	1,022	799
Prior year adjustments	(287)	(212)
Total current tax	735	587
Deferred tax:
Origination and reversal of timing differences	221	881
Changes in tax rates or tax laws	(7)	(5)
Write down of deferred tax assets	(15)	89
Total deferred tax	199	965
Total tax charged to income statement	934	1,552

Tax charge analysed between

	2006 £m	2005 £m
Tax charge attributable to policyholders’ returns	346	922
Tax charge on IFRS operating profit before tax attributable to shareholders’ profits from continuing operations	725	536
Tax (credit)/charge on profit on other activities	(137)	94
Total tax charged to income statement	934	1,552

The Group, as a proxy for policyholders in the UK, Ireland and Australia, is required to record taxes on investment income and gains each year. Accordingly, the tax benefit or expense attributable to UK, Irish and Australian life insurance policyholder returns is included in the tax charge.

(b) Tax charged to equity

(i) The total tax charge/(credit) comprises:

	2006 £m	2005 £m
Current tax credit	(9)	(13)
Deferred tax charge / (credit)	14	(262)
Total tax charged / (credited) to equity	5	(275)

(ii) The tax expense attributable to policyholders’ returns included in the charge above is nil (2005: £3 million).

(c) Tax reconciliation

The tax on the Group’s net profit before tax differs from the theoretical amount that would arise using the tax rate of the home country of the Company as follows:

	2006 £m	2005 £m
Net profit before tax	3,323	3,450
Tax calculated at standard UK corporation tax rate of 30% (2005: 30%)	997	1,035
Different basis of tax for UK life insurance	209	616
Adjustment to tax charge in respect of prior years	(287)	(253)
Non-assessable dividends	(55)	(26)
Non-taxable profit on sale of subsidiaries and associates	(80)	(4)
Disallowable expenses	46	55
Different local basis of tax on overseas profits	201	168
Deferred tax assets not recognised	(60)	(25)
Other	(37)	(14)
Tax charge for the year	934	1,552