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Income Tax | 6 Months Ended
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Jun. 30, 2025
Income Tax Disclosure [Abstract] |
Income Tax | 3. Income Tax Indivior is subject to taxation in several different jurisdictions. The Company's tax provision for each period presented was calculated using a forecasted annual tax rate, adjusted for discrete items occurring during the applicable period to arrive at an effective tax rate. The effective income tax rates for the relevant periods were as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Total income (loss) before income taxes | $ | 62 |  |  | $ | (121) |  |  | $ | 121 |  |  | $ | (48) |
Total income tax expense (benefit) | $ | 44 |  |  | $ | (23) |  |  | $ | 56 |  |  | $ | (12) |
Total effective tax rate | 71 | % |  | 19 | % |  | 46 | % |  | 25 | %
Our income tax rate for the three months ended June 30, 2025 differs from the U.K. Federal statutory rate of 25%, primarily due to a tax reserve on a U.K. HMRC settlement which became probable during the quarter, partially offset by U.K. innovation deductions. The HMRC settlement relates to aspects of prior years' intercompany financing arrangements and is not expected to impact our future tax rates. Our income tax rate for the six months ended June 30, 2025 differs from the U.K. Federal statutory rate of 25%, primarily due to a tax reserve on a U.K. HMRC settlement which became probable during the quarter, U.K. global minimum top-up tax, share based compensation shortfall tax expense and a valuation allowance against corporate interest limitation carryforwards, partially offset by U.K. innovation deductions and intragroup financing transactions. Our income tax rate for the three months ended June 30, 2024 differs from the U.K. Federal statutory rate of 25%, primarily due to disallowed transaction expenses, a valuation allowance against corporate interest limitation carryforwards, disallowed compensation, and a reduction to U.K. innovation deductions, partially offset by intragroup financing transactions. Our income tax rate for the six months ended June 30, 2024 differs from the U.K. Federal statutory rate of 25%, due primarily to intragroup financing transactions and share based compensation excess tax benefits, partially offset by a valuation allowance against corporate interest limitation carryforwards, disallowed transaction expenses and disallowed compensation. We are subject to income taxation in many jurisdictions. Unrecognized tax benefits reflect the differences between tax positions we have taken or expect to take on income tax returns and the amounts recognized in our financial statements. Resolution of the related tax positions with the relevant tax authorities may take many years to complete, and such timing is not entirely within our control. Changes in unrecognized tax benefits are summarized as follows for the six months ended June 30, 2025.
(In millions) |
Balance at December 31, 2024 | $ | 4 |
Additions for tax positions of prior years | 33 |
Balance at June 30, 2025 | $ | 37 |
During the three and six months ended June 30, 2025, we recorded $33 million in tax reserves related to a settlement with U.K. HMRC which became probable during the quarter, in relation to a finance structure in place from 2019 through May 2024. No other material changes to the Company's unrecognized tax benefit have occurred since December 31, 2024. During the three and six months ended June 30, 2025, the Company accrued and expensed interest of $5 million. The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, but not limited to, the settlement of ongoing tax audits and assessments and the expiration of applicable statutes of limitations. The Company is not subject to U.K. examinations by tax authorities for fiscal years before 2019 and U.S. federal income tax examinations by tax authorities for fiscal years before 2021. There are ongoing U.K. and U.S. state and local audits covering 2018 - 2022. An estimate of reasonably possible additional tax liabilities and interest that could arise on resolution of these examinations, including the impact from later periods, is in the range of nil to $12 million.

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