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Tax (Tables) | 12 Months Ended
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Dec. 31, 2017
Text block1 [abstract] |
Summary of Tax on Profit | Tax on profit
|  | 2017 $m |  |  | 2016 $m |  |  | 2015 $m |
Income tax |  |  |  |  |  |  |  |  |  |  |  |
UK corporation tax at 19.25% (2016: 20.00%, 2015: 20.25%): |  |  |  |  |  |  |  |  |  |  |  |
Current period |  |  | 10 |  |  |  | 10 |  |  |  | 7 |
Benefit of tax reliefs on which no deferred tax previously recognised |  |  | — |  |  |  | (7) |  |  |  | — |
Adjustments in respect of prior periods |  |  | (2) |  |  |  | (1) |  |  |  | (17) |
|  |  | 8 |  |  |  | 2 |  |  |  | (10) |
Foreign tax: |  |  |  |  |  |  |  |  |  |  |  |
Current period |  |  | 210 |  |  |  | 151 |  |  |  | 196 |
Benefit of tax reliefs on which no deferred tax previously recognised |  |  | (13) |  |  |  | — |  |  |  | (1) |
Adjustments in respect of prior periodsa |  |  | 2 |  |  |  | (97) |  |  |  | (27) |
|  |  | 199 |  |  |  | 54 |  |  |  | 168 |
Total current tax |  |  | 207 |  |  |  | 56 |  |  |  | 158 |
Deferred tax: |  |  |  |  |  |  |  |  |  |  |  |
Origination and reversal of temporary differences |  |  | (10) |  |  |  | 55 |  |  |  | 60 |
Changes in tax rates and tax lawsb |  |  | (87) |  |  |  | (2) |  |  |  | (21) |
Adjustments to estimated recoverable deferred tax assetsc |  |  | (9) |  |  |  | (25) |  |  |  | (13) |
Adjustments in respect of prior periodsa |  |  | (16) |  |  |  | 90 |  |  |  | 4 |
Total deferred tax |  |  | (122) |  |  |  | 118 |  |  |  | 30 |
Total income tax charge for the year |  |  | 85 |  |  |  | 174 |  |  |  | 188 |
Further analysed as tax relating to: |  |  |  |  |  |  |  |  |  |  |  |
Profit before exceptional itemsd |  |  | 201 |  |  |  | 186 |  |  |  | 180 |
Exceptional items: |  |  |  |  |  |  |  |  |  |  |  |
Tax on exceptional items (note 5) |  |  | 2 |  |  |  | (12) |  |  |  | 8 |
Exceptional tax (note 5) |  |  | (118) |  |  |  | — |  |  |  | — |
|  |  | 85 |  |  |  | 174 |  |  |  | 188 |
a | In 2016, included $83m in respect of a change in tax treatment being approved by the US tax authority.
b | In 2017, predominantly reflects a change in US tax rates following significant US tax reforms. In 2015, predominantly reflected the judgement that state tax law changes applied to the deferred gain from the 2014 disposal of a controlling interest in InterContinental New York Barclay.
c | Represents a re-assessment of the recovery of recognised and off-balance sheet deferred tax assets in line with the Group’s profit forecasts.
d | Includes $156m (2016: $162m, 2015: $123m) in respect of US taxes.
Summary of Reconciliation of Tax Charge Including Gain on Disposal of Assets |
|  | Totala |  |  | Before exceptional itemsb |
|  | 2017 % |  |  | 2016 % |  |  | 2015 % |  |  | 2017 % |  |  | 2016 % |  |  | 2015 % |
Reconciliation of tax charge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
UK corporation tax at standard rate |  |  | 19.3 |  |  |  | 20.0 |  |  |  | 20.3 |  |  |  | 19.3 |  |  |  | 20.0 |  |  |  | 20.3 |
Tax credits |  |  | (0.5 | ) |  |  | (2.4 | ) |  |  | (0.2 | ) |  |  | (0.5 | ) |  |  | (2.2 | ) |  |  | (0.4 | )
Differences in tax gains and accounting gains on asset disposals |  |  | — |  |  |  | — |  |  |  | (9.8 | ) |  |  | — |  |  |  | — |  |  |  | — |
Other permanent differences |  |  | 0.8 |  |  |  | 3.8 |  |  |  | 1.1 |  |  |  | 0.6 |  |  |  | 3.6 |  |  |  | 2.0 |
Non-recoverable withholding taxes |  |  | 0.3 |  |  |  | 0.7 |  |  |  | 0.1 |  |  |  | 0.3 |  |  |  | 0.7 |  |  |  | 0.3 |
Net effect of different rates of tax in overseas businessesc |  |  | 14.1 |  |  |  | 13.7 |  |  |  | 7.1 |  |  |  | 14.1 |  |  |  | 13.9 |  |  |  | 15.3 |
Effects of changes in tax rates resulting from significant US tax reform |  |  | (13.2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Release of provision for taxation on unremitted earnings following significant US tax reform |  |  | (7.6 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Transition tax liability arising from significant US tax reform |  |  | 4.7 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Effect of other changes in tax rates and tax lawsd |  |  | 0.3 |  |  |  | 0.4 |  |  |  | (1.5 | ) |  |  | 0.3 |  |  |  | 0.3 |  |  |  | 0.1 |
Benefit of tax reliefs on which no deferred tax previously recognised |  |  | (1.9 | ) |  |  | (1.2 | ) |  |  | (0.1 | ) |  |  | (1.9 | ) |  |  | (1.1 | ) |  |  | (0.1 | )
Effect of adjustments to estimated recoverable deferred tax assets |  |  | (1.3 | ) |  |  | (4.3 | ) |  |  | (0.9 | ) |  |  | (1.3 | ) |  |  | (4.1 | ) |  |  | (1.7 | )
Adjustment to tax charge in respect of prior periods |  |  | (2.5 | ) |  |  | (1.3 | ) |  |  | (2.8 | ) |  |  | (1.1 | ) |  |  | (1.1 | ) |  |  | (5.4 | )
Other |  |  | — |  |  |  | — |  |  |  | 0.1 |  |  |  | — |  |  |  | — |  |  |  | — |
|  |  | 12.5 |  |  |  | 29.4 |  |  |  | 13.4 |  |  |  | 29.8 |  |  |  | 30.0 |  |  |  | 30.4 |
a | Calculated in relation to total profits including exceptional items.
b | Calculated in relation to profits excluding exceptional items.
c | Before exceptional items includes 13.8%pt (2016: 12.6%pt, 2015: 13.5%pt) driven by the relatively high US federal tax rate.
d | In 2015, total of (1.5)% predominantly reflected the judgement that state tax law changes applied to the deferred gain from the 2014 disposal of a controlling interest in InterContinental New York Barclay.
Summary of Reconciliation of Tax Paid to Total Tax Charge in Income Statement | A reconciliation of tax paid to the total tax charge in the income statement follows:
|  | 2017 $m |  |  | 2016 $m |  |  | 2015 $m |
Current tax charge in the income statement |  |  | 207 |  |  |  | 56 |  |  |  | 158 |
Current tax credit in the statement of comprehensive income |  |  | — |  |  |  | (12 | ) |  |  | (2 | )
Current tax credit taken directly to equity |  |  | (12 | ) |  |  | (8 | ) |  |  | (8 | )
Total current tax charge |  |  | 195 |  |  |  | 36 |  |  |  | 148 |
Movements to tax contingencies within the income statementa |  |  | 3 |  |  |  | 11 |  |  |  | (7 | )
Timing differences of cash tax paid and foreign exchange differencesb |  |  | (26 | ) |  |  | 83 |  |  |  | (31 | )
Tax paid per cash flow |  |  | 172 |  |  |  | 130 |  |  |  | 110 |
Cash tax rate on total profitsc |  |  | 25 | % |  |  | 22 | % |  |  | 8 | %
a | Tax contingency movements are included within the current tax charge but do not impact cash tax paid in the year.
b | The timing difference in 2016 was predominantly in respect of the US where the payment regulations resulted in a large overpayment in the year.
c | Calculated as total cash paid divided by total accounting profit before tax.
Summary of Deferred Tax | Deferred tax
|  | Property, plant and equipment $m |  |  | Deferred gains on loan notes $m |  |  | Deferred gains on investments $m |  |  | Losses $m |  |  | Employee benefits $m |  |  | Intangible assets $m |  |  | Undistributed earnings of subsidiaries $m |  |  | Other short-term temporary differencesa $m |  |  | Total $m |
At 1 January 2016 |  |  | 99 |  |  |  | 55 |  |  |  | 87 |  |  |  | (67 | ) |  |  | (32 | ) |  |  | 70 |  |  |  | 70 |  |  |  | (196 | ) |  |  | 86 |
Income statement |  |  | 22 |  |  |  | (3 | ) |  |  | (9 | ) |  |  | 19 |  |  |  | (3 | ) |  |  | (7 | ) |  |  | — |  |  |  | 99 |  |  |  | 118 |
Statement of comprehensive income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 12 |  |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | 11 |
Statement of changes in equity |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3 | ) |  |  | (3 | )
Exchange and other adjustments |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | (4 | ) |  |  | (3 | ) |  |  | (11 | ) |  |  | 6 |  |  |  | (9 | )
At 31 December 2016 |  |  | 120 |  |  |  | 52 |  |  |  | 78 |  |  |  | (44 | ) |  |  | (27 | ) |  |  | 60 |  |  |  | 59 |  |  |  | (95 | ) |  |  | 203 |
Income statementb |  |  | (22 | ) |  |  | (18 | ) |  |  | (24 | ) |  |  | 1 |  |  |  | (4 | ) |  |  | (4 | ) |  |  | (61 | ) |  |  | 10 |  |  |  | (122 | )
Statement of comprehensive income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | — |  |  |  | (1 | ) |  |  | 4 |  |  |  | 13 |
Statement of changes in equity |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 3 |
Exchange and other adjustments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 1 |  |  |  | 2 |  |  |  | 3 |  |  |  | (5 | ) |  |  | 4 |
At 31 December 2017 |  |  | 98 |  |  |  | 34 |  |  |  | 54 |  |  |  | (40 | ) |  |  | (20 | ) |  |  | 58 |  |  |  | — |  |  |  | (83 | ) |  |  | 101 |
a | Primarily relates to provisions, accruals, amortisation and share-based payments.
b | Movements largely reflect the impact of significant US tax reform enacted on 22 December 2017.
Summary of Deferred Taxes by Territory | The closing balance is further analysed by key territory as follows:
|  | Property, plant and equipment $m |  |  | Deferred gains on loan notes $m |  |  | Deferred gains on investments $m |  |  | Losses $m |  |  | Employee benefits $m |  |  | Intangible assets $m |  |  | Undistributed earnings of subsidiaries $m |  |  | Other short-term temporary differences $m |  |  | Total $m |
UK |  |  | (5 | ) |  |  | — |  |  |  | — |  |  |  | (17 | ) |  |  | (5 | ) |  |  | (3 | ) |  |  | — |  |  |  | (19 | ) |  |  | (49 | )
US |  |  | 103 |  |  |  | 34 |  |  |  | 54 |  |  |  | (15 | ) |  |  | (15 | ) |  |  | 29 |  |  |  | — |  |  |  | (60 | ) |  |  | 130 |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (8 | ) |  |  | — |  |  |  | 32 |  |  |  | — |  |  |  | (4 | ) |  |  | 20 |
|  |  | 98 |  |  |  | 34 |  |  |  | 54 |  |  |  | (40 | ) |  |  | (20 | ) |  |  | 58 |  |  |  | — |  |  |  | (83 | ) |  |  | 101 |
Summary of Deferred Tax Balance After Offset of Assets and Liabilities | The analysis of the deferred tax balance after considering the offset of assets and liabilities within entities where there is a legal right to do so is as follows:
|  | 2017 $m |  |  | 2016 $m |
Analysed as: |  |  |  |  |  |  |  |
Deferred tax assets |  |  | (56 | ) |  |  | (48 | )
Deferred tax liabilities |  |  | 157 |  |  |  | 251 |
|  |  | 101 |  |  |  | 203 |
Summary of Unrecognised Deferred Tax Position | The total unrecognised deferred tax position is as follows:
|  | Gross |  |  | Unrecognised deferred tax |
|  | 2017 $m |  |  | 2016 $m |  |  | 2017 $m |  |  | 2016 $m |
Revenue losses |  |  | 452 |  |  |  | 518 |  |  |  | 76 |  |  |  | 94 |
Capital losses |  |  | 515 |  |  |  | 475 |  |  |  | 99 |  |  |  | 83 |
Total losses |  |  | 967 |  |  |  | 993 |  |  |  | 175 |  |  |  | 177 |
Othera |  |  | 35 |  |  |  | 27 |  |  |  | 9 |  |  |  | 5 |
Total |  |  | 1,002 |  |  |  | 1,020 |  |  |  | 184 |  |  |  | 182 |
a | Primarily relates to provisions, accruals and amortisation.
Summary of Unrecognized Deferred Tax Based on Expiry Date | There is no expiry date to any of the above unrecognised assets other than for the losses as shown in the table below:
|  | Gross |  |  | Unrecognised deferred tax |
|  | 2017 $m |  |  | 2016 $m |  |  | 2017 $m |  |  | 2016 $m |
Expiry date: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2020 |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 1 |
2021 |  |  | 21 |  |  |  | 27 |  |  |  | 5 |  |  |  | 7 |
2022 |  |  | 11 |  |  |  | 11 |  |  |  | 3 |  |  |  | 3 |
2023 |  |  | 1 |  |  |  | 3 |  |  |  | — |  |  |  | 1 |
2024 |  |  | 20 |  |  |  | 20 |  |  |  | 1 |  |  |  | 1 |
After 2024 |  |  | 118 |  |  |  | 125 |  |  |  | 26 |  |  |  | 25 |

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