Briefing Note
Land Remediation Relief
Taxbreaks for developing contaminated or derelict sites
Land Remediation Relief
- Land Remediation Relief (LRR) was introduced in 2001 to encourage the development of sites blighted by previous industrial use.
- Contaminated Land and/or Long Term Derelict Land are covered.
- Relief of 150% may be claimed against Corporation Tax for the additional cost of dealing with the contamination.
- Investigation and remediation costs are included (but not desk studies).
- Previously, landfill tax was also relieved, but this was discontinued for new applications in 2008.
Definitions
- Land – The ground, together with the buildings and other structures on it.
- Contaminated Land – Land containing substances causing harm or with the serious potential to cause harm (in the development) to people, buildings or the environment, or pollution of ground or surface waters. Contamination in buildings is included, e.g. if asbestos requires stripping before demolition.
- Long Term Derelict Land – Land out of productive use since 1 April 1998 (or when acquired by the claimant, if earlier) and incapable of being brought into productive use unless buildings or structures on it are demolished.
Main Conditions and Exclusions
- The polluter cannot claim or get the benefit of LRR (e.g. if an inflated price for the land is paid to the polluter, LRR might not be allowed for the purchaser).
- Contamination must require remediation because its potential to cause harm would prevent construction proceeding. (Remediation can also include protection, e.g. using sulphate-resisting concrete.)
- Relief can only be claimed if remediation is carried out.
- No relief is allowed against landfill tax. However, additional costs of transportation and disposal are allowed.
- No relief is allowed for sites subject to a remediation notice or works order issued by the Local Authority.
- No relief is allowed on work covered by other subsidies.
- Generally, relief is not allowed for naturally occurring contaminants. However, relief for Arsenic, Radon protection and Japanese Knotweed is allowed.
- Relief can be claimed retrospectively (up to 6 years) subject to some limitations.
Derelict Land
Relief for long term derelict land is limited by statute to the investigation and removal of the following structures:
- Post-tensioned heavy weight concrete construction.
- Building foundations, machinery bases and concrete pile caps.
- Reinforced concrete basements.
- Below ground services (gas, water, sewerage, electricity and telecoms).
Notes
- This guidance is for information only and may be subject to change.
- More detailed guidance is available on the HMRC website: http://www.hmrc.gov.uk/manuals/cirdmanual/CIRD60000.htm
Seminars: SMP is pleased to offer free seminars on Contaminated Land, Site Investigation Work and other areas. Please contact us on Engineers.smp@mistral.co.uk

