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| Notes forming part of the group financial statements 9 Tax on surplus on ordinary activities
No liability to corporation tax arises on Group income, principally because Licence Fee revenue up to 31 December 2005 was exempt from taxation. As a result, at 31 December 2005, the Group had corporation tax losses forward of €1.71 billion (31 December 2004: €1.55 billion). No deferred tax assets or liabilities have been recognised. A liability to capital gains tax arose during 2004 on the disposal of development land. Profits arising on a disposal of development land cannot be offset for tax purposes by any of the losses available to the Group. As illustrated below, the exemption of Licence Fee revenue from taxation and the related availability of current year tax losses are the principal reconciling items between the current tax charge on ordinary activities reported in the income and expenditure account and the tax charge that would result from applying the current standard rate of corporation tax to the surplus on ordinary activities before tax.
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