What is Land Remediation Relief?
Introduced in 2001, LRR is a tax relief for limited companies that clean up contaminated and derelict land and bring it back into productive use.
LRR allows you to claim relief of 150% of the costs associated with the clean-up and can also be made retrospectively over a two year period. The company can be profit or loss making, with a tax credit available for loss making companies at 16%.
In order to claim LRR, the land must be:
- located in the UK
- acquired by the company to carry out its trade; and
- contaminated or partly contaminated at acquisition.
What expenditure qualifies?
- Expenditure incurred on preparatory activities such as site visits or risk assessments;
- Capital expenditure as part of the remediation works;
- Staff costs based on time spend on remediation actives; and
- Sub-contractor costs whether preparatory or during the remediation phase.
Note that this expenditure must be spent on land which is contaminated and would not have been spent shout the land not be contaminated.
What does not qualify?
- Expenditure that has been subsidised (by a grant, for example);
- Expenditure incurred by a company not having a ‘major interest’ in the land (freehold or minimum lease of seven years);
- Expenditure incurred due to the company contaminating the land after acquisition; and
- Expenditure incurred on removal of landfill.
Who can claim?
- House builders
- UK developers
The next step
To discuss your specific circumstances and find out whether you could be eligible to claim Land Remediation Relief, please contact one of our specialists or use the form below.