Page 90 - 86395_CCB - 2024 Annual Report (web)

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Deferred tax assets are reviewed at each reporting 13 Cash and cash balances at Central banks
date and are reduced to the extent that it is has Cash and cash balances at Central banks include
become probable that future taxable profits will notes and coins in hand, unrestricted balances
be available against which they can be used. held with central banks, and highly liquid financial
The measurement of deferred tax reflects the tax assets with original maturities of three months or
consequences that would follow the manner in less from the date of acquisition, that are subject
which the Bank expects, at the reporting date, to an insignificant risk of change in their fair value
to recover or settle the carrying amount of its
and are used by the Bank in the management of its
assets and liabilities.
short‑term commitments. Cash and cash balances
£’000 2024 2023 at Central banks are carried at amortised cost in the
statement of financial position.
Current tax expense
£’000 2024 2023
In respect of the current year 8,462 9,313
Unrestricted balances with 292,850 302,473
In respect of prior years (52) 206
central banks*
8,410 9,519
Cash and balances with other 12,139 10,420
Deferred tax expense banks
Origination and reversal of 114 82 Total 304,989 312,893
temporary differences
* Included within the unrestricted balances with central banks is £475k of
accrued interest for 2024 (2023: £768k)
Adjustments in respect of (367) 19
prior periods
14 Loans and advances to banks
Effect of tax rate change on – –
opening balance Loans and advances to banks are measured at
amortised cost as the Bank holds these assets for
(253) 101 the objective of collecting contractual cash flows,
and the cash flows associated with the assets
Total income tax expense 8,157 9,620
include only payments of principal and interest
(SPPI). As with loans and advances to customers
The income tax expense for the year can be
(Note 15), the Bank has assessed whether there
reconciled to the accounting profit as follows:
are any contractual terms which may cause the
£’000 2024 2023 financial assets to fail the SPPI test. The Bank has
noted no such terms. The Bank does not incur any
Profit before tax 35,820 40,910 transactional or other such integral fees which
require an effective interest rate to be specifically
Tax on profit at standard 8,973 9,622
CT rate 25% (2023: 23.52%) calculated for these assets. Income is recognised at
the contractual interest rate on an accruals basis.
Effects of:
£’000 2024 2023
Fixed asset differences 7 8
Net loans and advances 12,139 10,420
Expenses not deductible 211 10 to banks
for tax purposes
* Included within the unrestricted balances with central banks is £475k of
Bank surcharge – 266 accrued interest for 2024 (2023: £768k)
Adjustments to tax charge in (52) 206
respect of previous periods 15 Loans and Advances to customers
Loans and advances to customers are initially
Adjustments to tax charge (367) 19
in respect of previous periods measured at fair value plus incremental direct
– deferred tax transaction costs, and subsequently at their
amortised cost, using the effective interest method.
Re‑measurement of deferred – 5
tax for changes in tax rates The Bank has measured its loans and advances
to customers at amortised cost on the basis that
Convertible loan note (615) (516) the Bank holds these assets for the objective of
interest payments collecting contractual cash flows, and the cash
flows associated with the assets include only
Total tax charge 8,157 9,620
payments of principal and interest.
In making this assessment the Bank has
considered whether the financial asset contains
a contractual term that could change the timing
or amount of contractual cashflows such