What is it?
Land Remediation Relief (including derelict land) was introduced in 2001 and modified in 2009 to incentivise the development of brownfield sites blighted by contamination and dereliction. It is only available to companies paying UK corporation tax.
Land Remediation Relief is a relief from corporation tax, providing deductions of up to 150% for qualifying expenditure incurred by companies cleaning up land acquired from a third-party property in a contaminated state.
Derelict Land Relief provides a deduction of up to 150% for qualifying expenditure incurred in bringing long term derelict land back into use. The land needs to have been unused since April 1998 to qualify. The developer should consider at an early stage in the project whether there are any subsurface assets or adjacent sensitive structures which could be impacted by the proposed development.
What are the eligible costs?
The expenditure that qualifies on derelict sites is determined by statute and includes the costs incurred in removing building foundations and machine bases; removing reinforced concrete pile caps and basements; removing post tensioned concrete and removal of redundant services.
Land Remediation Relief is available for any additional costs incurred as a result of the land being in a contaminated state. This includes any additional investigation works, monitoring and remediation, staff costs and materials.
Who can’t claim?
The polluters, those connected to the polluters, and those in receipt of a subsidy are not eligible for Land Remediation Relief.
When is it claimed?
Land Remediation Relief is claimed either in the year of sale for a developer, or the year of expenditure for capital projects. Derelict Land Relief is claimed either in the year of expenditure, or the year the expenditure is deducted for tax purposes. Claims can also be made retrospectively, either four years from sale, or two years from capital spend.
Who can you talk to?
Patrick Parsons work with The Fiscal Incentives Group (TFI) who offer a comprehensive service across the full project lifecycle, to ensure you get 100% of what you are entitled to claim; and help you avoid some of the common pitfalls that can prevent a claim being made. Get in touch to discuss.