Land remediation relief

Produced by Tolley
Land remediation relief

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Land remediation relief
  • Overview of land remediation relief
  • Qualifying conditions
  • Qualifying land remediation expenditure
  • Relief available for land remediation expenditure
  • Deduction for capital expenditure
  • Deduction in computing profits
  • Land remediation tax credit

Overview of land remediation relief

Companies that acquire contaminated or derelict land for the purposes of their trade or UK property business can claim an enhanced deduction of 150% for clean-up costs. The relief is not available to individuals or partnerships. However, a company that is a member of a partnership can claim relief for its share of the partnership’s qualifying land remediation expenditure.

By election, relief can be claimed by a company for capital expenditure incurred on remediation of land acquired for use in its trade or for its UK property business to be given as a 150% revenue deduction in computing the profits of that trade or business, although not for expenditure that qualifies for capital allowances.

Where the enhanced deduction results in a loss then the loss can be used in the normal way or it can be surrendered in return for a cash payment.

Further details of land remediation relief can be found in CIRD60000.

See also Simon’s Taxes D1.5.

Qualifying conditions

The qualifying conditions for the relief are that the company has acquired a major interest in the land in the UK for the purposes of a UK property business or a trade carried on by the company. The land must have been in a contaminated state at acquisition, although this is not a requirement if the land is contaminated by Japanese knotweed. Alternatively, the land must have been in a derelict state throughout the period beginning on the earli

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