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