Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate on Net income was 18.0% and 19.1% for the three and nine months ended September 30, 2022, respectively. The effective tax rate on Net income (loss) was (2.6)% and 51.4% for the three and nine months ended September 30, 2021, respectively.

For the three and nine months ended September 30, 2022, the quarter-to-date tax rate was primarily driven by the geographical distribution of income and certain discrete items. The year-to-date tax rate was primarily driven by the geographical distribution of income and certain discrete items, primarily the favorable impacts of share-based payments.

For the three and nine months ended September 30, 2021, the quarter-to-date tax rate was primarily driven by the impact of the $1 billion payment made in connection with the termination of the proposed combination with WTW (the “Termination Fee”). The year-to-date tax rate was primarily driven by the Termination Fee, the U.K. tax rate increase, and the tax benefit of share-based payments. The U.K. enacted legislation on June 10, 2021, which increased the corporate income tax rate from 19% to 25% with effect from April 1, 2023, and the Company remeasured its U.K. deferred tax assets and liabilities accordingly.