Land Remediation FAQs

It’s important to work out whether the land you’ve acquired is eligible for Land Remediation Relief.

Land/buildings are classed as being within a contaminated state if the contamination arises from industrial activity that:

• Poses a risk of causing relevant harm
• Presents a series possibility of causing relevant harm in the future
• Results in (or poses a future threat) of significant pollution to coastal waters, streams, rivers or groundwater

The term ‘relevant harm’ essentially refers to anything that may cause a significantly adverse effect to animals, humans or buildings placed on the land (which could have a negative impact on the way the building is used).

When applying for Land Remediation Tax Relief, there are certain forms of qualifying expenditure you can claim for.

Qualifying costs for cleaning up contaminated land include:

• Removing asbestos from buildings
• The remediation of contaminated land
• Digging out buried structures
• Treating harmful chemicals, organisms and natural contaminants (such as Japanese Knotweed, arsenic and radon gas)
• Capital expenditure and capital allowances (including plant and machinery)
• Labour and employment costs (including subcontractor fees)
• Preparatory activities (things like risk assessments, consulting charges, lab costs and regulatory liaison fees)

To find out whether you can claim tax credits for LRR, please speak to our helpful team today.

Another form of tax relief that links to Land Remediation Relief is Derelict Land Relief (DLR). DLR is a form of tax relief first introduced in 2009, with the aim being to encourage prospective buyers to purchase derelict land to restore it back to productive use.

To be eligible, the land must be listed as derelict on the English National Land Use Database since 1st April 1998. You may be able to claim relief on your tax return for the cost of demolishing the derelict property and restoring it to a productive site.

If you’d like to claim Land Remediation Relief on your tax return, several other conditions must be met to ensure you qualify.

For claims in which the buildings on the land are classed as an asset (e.g. if you’re a landlord), you must make your claim in the same tax year that the expenditure occurred. However, in other cases, you’ll usually have a three-year retrospective time period in which to make your claim. Other conditions that must be met to claim Land Remediation Relief are:

• The land must be situated within the UK
• The land must have been acquired for trade or business purposes
• The cost of clearing and remediating the land would not have been required if the land was not classed as contaminated

Several factors may exclude you from claiming LRR:

• If the qualifying expenditure has been subsidised elsewhere
• If the cost of acquiring the land was discounted due to the land contamination

If you feel that you meet the criteria for claiming Land Remediation Relief, please reach out to our team and we’ll help you through the process.