Note 11 — Income Taxes

The components of the Group's provision for income taxes for the years ended December 31, 2017, 2016 and 2015, are as follows (in millions):

                                                                                                                                                                                    

The components of the Group's total income before taxes for the years ended December 31, 2017, 2016 and 2015, are as follows (in millions):

                                                                                                                                                                                    

The Group's top holding company is tax resident in the UK and is subject to the tax laws and regulations of that country. The following is a reconciliation between the UK statutory corporation tax rate and the effective tax rate on the Group's income from operations.

                                                                                                                                                                                    

The Group operates in several taxing jurisdictions around the world, each with its own statutory tax rate and set of tax laws and regulations. As a result, the future blended average statutory tax rate is dependent on changes to such laws and regulations and the mix of profits and losses of the Group's subsidiaries. The Group's blended average statutory tax rate increased subsequent to the Merger with JCG.

Tax Legislation

The Group has significant tax expense and tax current and deferred payable impact associated with the Act enacted on December 22, 2017, which resulted in an income tax benefit of $340.7 million. The Act includes significant changes to the U.S. corporate income tax system: it reduces the U.S. federal corporate tax rate from 35.0% to 21.0% as of January 1, 2018; it shifts the U.S. to a modified territorial tax regime which requires companies to pay a one-time mandatory tax on earnings of certain foreign subsidiaries that were previously tax deferred; and it creates new taxes on certain foreign-sourced earnings. Income tax effects resulting from changes in tax laws are accounted for by the Group in accordance with the authoritative guidance, which requires that these tax effects be recognized in the period in which the law is enacted and the effects are recorded as a component of provision for income taxes from continuing operations.

On December 22, 2017, the SEC issued guidance under Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act ("SAB 118") directing taxpayers to consider the impact of the Act as "provisional" when they do not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete their accounting for the change in tax law. In accordance with SAB 118, the estimated income tax benefit of $340.7 million represents the Group's best estimate based on interpretation of the Act as the Group is still accumulating data to finalize the underlying calculations, or in certain cases, the U.S. Treasury is expected to issue further guidance on the application of certain provisions of the Act. In accordance with SAB 118, the additional estimated income tax benefit related to the revaluation of deferred tax assets and liabilities of $345.4 million and tax expense related to the one-time tax on the previously deferred earnings of foreign subsidiaries of $4.7m is considered provisional and will be finalized before December 22, 2018.

During 2016, tax legislation enacted in the UK to reduce the corporation tax rate in future years resulted in a $4.0 million net non cash benefit (2015: $8.1 million benefit) related to the revaluation of certain deferred tax assets and liabilities. The UK corporation tax rate reduced from 20% to 19% with effect from April 1, 2017 and then to 17% with effect from April 1, 2020.

Deferred Taxes

The significant components of the Group's deferred tax assets and liabilities as of December 31, 2017 and 2016, are as follows (in millions):

                                                                                                                                                                                    

Deferred tax assets and liabilities that relate to the same jurisdiction are recorded net on the Group's Consolidated Balance Sheets as non-current balances and as of December 31, 2017 and 2016, are as follows (in millions):

                                                                                                                                                                                    

A valuation allowance has been established against the deferred tax assets related to the Group's tax loss carryforward where a history of losses in the respective tax jurisdiction makes it unlikely that the deferred tax asset will be realized or where it is unlikely that the Group would generate sufficient taxable income of the appropriate character to realize the full benefit of the deferred tax asset. The valuation allowance for deferred tax assets increased by $38.4 million in 2017. The increase is primarily attributable to foreign net operating losses and capital losses.

The Group has made no provision for income taxes on undistributed earnings of foreign subsidiaries as most dividends distributed by foreign subsidiaries to their direct parent and ultimately to the Group's top holding company attract no additional tax. The U.S subsidiaries evaluated liquidity requirements in the U.S. and the capital requirements of the Group's foreign subsidiaries and concluded that foreign earnings be indefinitely reinvested.

Unrecognized Tax Benefits

The Group operates in several tax jurisdictions and a number of years may elapse before an uncertain tax position, for which the Group has unrecognized tax benefits, is finally resolved. A reconciliation of the beginning and ending liability for the years ended December 31, 2017, 2016 and 2015, is as follows (in millions):

                                                                                                                                                                                    

The entire unrecognized tax benefits, if recognized, would favorably affect the Group's effective tax rate in future periods.

The Group recognizes interest and penalties on uncertain tax positions as a component of the income tax provision. At December 31, 2017, 2016 and 2015 the total accrued interest balance relating to uncertain tax positions was $1.5 million, $0.7 million and $1.2 million, respectively. Potential penalties at December 31, 2017, 2016 and 2015 were insignificant and have not been accrued.

The Group is subject to U.S. federal income tax, state and local income tax, UK income tax and income tax in several other jurisdictions, all of which can be examined by the relevant taxing authorities. For the Group's major tax jurisdictions, the tax years that remain open to examination by the taxing authorities at December 31, 2017 are 2014 and onwards for U.S. Federal tax and a number of State tax. A handful of States have open years from 2008 and onwards. The tax years from 2015 and onwards remain open for the UK.

The Internal Revenue Service ("IRS") is examining the Henderson U.S. federal tax filing for the year ended December 31, 2014. In addition, a number of tax years from 2005 onwards remain open for a limited number of subsidiaries in the UK while cases involving other taxpayers are being litigated through the judicial system, the results of which will resolve the Group's position for these open years. While examination outcomes are subject to significant uncertainty, they are not expected to be material as the Group has recognized a tax benefit only for those positions that meet the more likely than not recognition threshold. It is reasonably possible that the total amounts of unrecognized tax benefits will change within the next 12 months due to completion of tax authorities' exams or the expiration of statutes of limitations. Management estimates that the existing liability for uncertain tax positions could decrease by approximately $1.1 million within the next 12 months, ignoring changes due to foreign currency translation.