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.
At 4Stamp, we can validate whether you qualify for LRR on the costs of cleaning up land for development and regeneration projects.
Developers, commercial property owners and investors who remove contamination from land or buildings purchased from third parties are eligible for tax relief on the cost of the clean up. Refurbishments, developments and regeneration projects qualify for this tax relief known as Land Remediation Relief (LRR). Businesses can claim corporation tax relief of up to 150% of the cost of clearing up contaminated land.
Rates of Corporation Tax Relief
100%
Deduction for capital expenditure on the remediation of the land
+50%
An ADDITIONAL deduction for any revenue expenditure.
24%
A tax credit (cash in hand) is eligible to be claimed by loss-making businesses.
There are two types of eligible land
Severe injury (or worse) or damaging to living organisms
Water pollution
Damage to the ecosystem
Damage to property
Contaminated land due to industrial activity which would cause harm. This includes:
What does this actually mean? It means that you are likely to qualify if you have had to remove or encase any of the following:
Asbestos such as in roofing panels
Arsenic
Ground / landfill gases
Petrol, Diesel, Oil (hydrocarbons contamination) including removal of storage tanks
Redundant utility services
Post-tensioned concrete foundations
Soil or concrete sulphate contamination
The Land must not be in productive use, which means that it is not currently being used for any beneficial purpose.
In order for the land to be put to productive use, buildings or other structures must be removed.
Land in a derelict state must meet both the following criteria:
Qualifying Expenditure
Qualifying expenditure refers to the expenses incurred by the company that meet these conditions:
The expenditure would not have been incurred if the land was not contaminated or in a derelict state.
The expenditure is not subsidised.
The expenditure is on scoping out the remediation process (such as surveys and excavations)
The expenditure is on Preparatory activities (such as risk assessments and consultancy fees)
Capital expenditure is on the cost of plant and machinery.
Your own labour costs where more than 20% of employee time has been spent on the remediation.
Actual remediation sub-contractor costs
Conditions that prevent you being eligible
The cost of the land remediation was not incurred within the last 3 years (you have 2 years to claim relief after the financial year the costs were incurred)
The land was contaminated by the claimant company
The claimant company does not have a ‘major interest’ in the land (freehold or a minimum lease of 7 years)
The expenditure was subsidised, for example by grant funding
The purchase price paid for the land was discounted due to the cost of remediation works
You are a partnership or sole trader
How we can help
Our team of certified tax specialists will validate your eligibility for LRR. We are an introducer to the UK leading LRR specialists who will take eligible claims forward. You will be provided with a report calculating the level of relief you can claim. Accompanying this report will be a step-by-step document for your accountant to input your tax claim. Our partner will provide all the numbers and crucially, where in your corporation tax return, you need to enter the figures.