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  • Contaminated Land Tax Relief

    Land Remediation Relief (“LRR”) also known as Contaminated Land Tax Relief, can provide tax relief in all commercial property sectors where businesses are subject to corporation tax. Unlike capital allowances, LRR is available to both housebuilders, property investors and developers. It was introduced in 2001 in an attempt to incentivise the use of brownfield sites rather than developing on greenbelt.

    Pay less tax

    Through a claim for contaminated land tax relief, you will be afforded a reduction in your business’ tax liability

    Negotiate with the vendor

    If you are aware that you may receive an enhanced deduction from your tax liability for developing the land/property, this may enhance your negotiation position with the vendor

    Offset expensive costs

    Whilst the cost of developing a contaminated site is expensive, via a claim for contaminated land tax relief you may receive an enhanced deduction for the costs from your profits thereby making your project more financially viable

    How can we help?

    It is recommended when structuring acquisitions of potential development sites that you take professional tax advice to ensure that land remediation relief is not unnecessarily lost. Contaminated Land Tax Relief can provide tax relief in all commercial property sectors where businesses are subject to corporation tax. But, unlike capital allowances, LRR is available to both housebuilders, property investors and developers.

    To be eligible, the land or building must be owned by a limited company which then undertakes qualifying remediation (i.e. to rectify any contamination of the site in question). The land or building must be owned either as a freehold or leasehold with at least a 7-year term at inception.

    Broadly speaking, to qualify for relief the land or buildings must pose a possibility of ‘serious harm’ to persons and the environment, ‘damage’ to buildings, or pollution to watercourses.

    To qualify for the tax relief, the money must be spent on the remediation of the land. Some examples of qualifying costs include (amongst other things)

    Excavations

    Surveys

    Soil/groundwater treatment to scope out the remediation process

    Staff wages & employers NIC where more than 20% of employee time is spent on remediation; materials directly employed in the remediation

    Payments to sub-contractors directly engaged in the remediation

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    Please provide as much detail as possible in regards to the reason for your enquiry so our tax advisers can prepare and tailor their response to reflect your needs. We will endeavour to - respond / call you back - to discuss your enquiry and you will not be charged for this time.

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