Land remediation relief
Produced in partnership with Begonia Filgueira FIEMA of Acuity Legal
Land remediation relief

The following Environment practice note Produced in partnership with Begonia Filgueira FIEMA of Acuity Legal provides comprehensive and up to date legal information covering:

  • Land remediation relief
  • What is land remediation relief?
  • Deduction for capital expenditure
  • What relief is given?
  • When is relief granted?
  • Interaction with capital allowances and capital gains
  • Additional deduction for revenue qualifying land remediation expenditure
  • What relief is given?
  • When is the relief given?
  • Acquisition of a major interest in land
  • More...

What is land remediation relief?

Land remediation relief (LRR) is a relief from corporation tax for expenditure on remediating contaminated land or bringing derelict land back into use. The relief was under threat of being discontinued after 2012. However, in the 2012 budget, the government confirmed that the relief will continue.

In 2009, LRR was extended to address market failure by bringing long term derelict land back into use. An incentive was given where land, whose development has been affected by various kinds of continuing dereliction, is brought back into productive use.

LRR provides:

  1. a 100% deduction for qualifying land remediation expenditure of a capital nature when calculating the profits of a UK property business or a trade in the period in which the expenditure is incurred, eg acquiring an item that would be long term in nature such as a gas membrane, and

  2. an additional 50% deduction for qualifying land remediation expenditure of a revenue nature when calculating the profits of the UK property business or trade in the accounting period, ie in addition to the deduction for the expenditure that would be available to the company under normal corporation tax principles

Since LRR is a relief from corporation tax it is not available to individuals or partnerships. However, a company that is a member of a partnership can in some instances claim relief for its share

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