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What Is Land Remediation Relief?

Blog

What Is Land Remediation Relief?

 

Land Remediation Relief (LRR) is amongst one of the most generous tax reliefs available to investors and property developers. The relief provides a tax deduction of up to 150% of the money spent on qualifying expenditure for remediating land and buildings.

This can include land contaminated by a past industrial activity or by certain naturally occurring contaminants. LRR is also available costs for bringing land, that has been derelict since 1 April 1998, back into productive use.

Contaminants can include oil spillage, hydrocarbons, radon, arsenic, Japanese knotweed, asbestos, buried structures and much more.

Who could benefit from an LRR Review?

The legislation sets out a framework of conditions which must be satisfied to claim LRR. Typical beneficiaries would be investors, property developers, house builders and owner occupiers that have cleared a contaminant from a site.

There are 4 simple questions you can ask yourself to find out if you could be eligible.

  • Are you subject to UK corporation tax?
  • Is the land in the UK?
  • Do you have an interest in the land in question?

Can you confirm you were not the polluter of the land nor have a connection to the polluter?

 

 

 

Claiming land remediation relief provides cash tax benefits as qualifying land remediation expenditure attracts a deduction of 100% of the remediation costs plus an additional 50% deduction.

What is the benefit of claiming land remediation relief?

Claiming land remediation relief provides cash tax benefits as follows:

  • For property investors/owner occupiers – 150% of the qualifying land remediation relief. This provides a tax saving of £28.50 for every £100 spent on qualifying land remediation
  • For developers – an extra 50% deduction (in addition to the usual 100% revenue deduction available). This provides an additional tax saving of £9.50 for every £100 spent on qualifying land remediation.

Where a company is loss making, the qualifying land remediation relief can be surrendered for a tax credit which is 24% of the qualifying remediation amount.