Tax Relief For Cleaning Up Contaminated Land And Buildings

• Published date: 17 May 2022
• Subject Matter: Tax, Tax Authorities
• Law Firm: Hillier Hopkins
• Author: Beverley Wood

Cleaning up contaminated land and buildings can represent a major cost for developers, putting into question the viability of a scheme. There is, however, a valuable tax relief for developers who take on the challenge.

In 2001, the Government introduced Land Remediation Relief to encourage the decontamination and redevelopment of industrial land and buildings. It means that a business can claim Corporation Tax relief of 150% on the costs incurred. It is a relief that is little understood or used.

There are, as you might expect, strict criteria that must be met.

What qualifies for Land Remediation Relief?

Land and buildings are considered contaminated if, because of industrial activity, there is contamination present which could cause harm. The tax relief is available for several decontamination measures on both land and buildings.

This includes the removal of contaminated soil and water, the treatment of harmful organisms, the removal of natural contaminants (for example, radon and arsenic), the removal of buried structures, and the removal and treatment of invasive plants such as Japanese Knotweed.

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

To qualify, land must meet the Government's definition of 'causing harm'. This...