Land Remediation Relief

The Land…

THE LAND – OWNERSHIP

• The land must be acquired from a third party.
• LRR does not apply to land that was contaminated or derelict due to the actions of the company or a connected party (the ‘Polluter pays’ principle).
• The company must hold a “major interest” in the land or property. This typically means owning the freehold or holding a lease with at least seven years remaining.

THE LAND – CONTAMINATED AND/OR DERELICT

➡️   The land must be contaminated, meaning it has been affected by harmful substances due to industrial activity or other pollutants that cause significant harm to living organisms, damage to property, or pollution of water resources.

➡️   Alternatively, the land may qualify if it is in a derelict state, which generally refers to land that is not currently in productive use and requires substantial work to restore it.

What is eligible? (Examples of contamination)

✅  Treatment and removal of invasive plants such as Japanese Knotweed.

✅  Heavy metal contaminants from industrial processes.

✅  Sulphates in soil and concrete.

✅  Ground or landfill gases.

✅  Radon protection measures.

✅  Arsenic.

✅  The relief is also available for the removal of Asbestos from buildings, post-tensioned concrete, building and machinery foundations, below-ground redundant services, buried structures and reinforced concrete basements.

Tax Benefits

• Claiming LRR offers owners and investors an opportunity to treat qualifying spend as a revenue expense for tax purposes offering 150% relief. For developers, LRR reduces their taxable profits by half (50%) of the qualifying remediation cost.

• If a company incurs a loss during the accounting period in which it undertakes land remediation, it can choose to surrender the loss for a payable tax credit. The credit is calculated at 16% of the surrendered loss, providing a cash benefit to the company. This credit effectively returns 24% of the qualifying remediation expenditure as cash, which can be particularly beneficial for companies that are not currently profitable.

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