What is Land Remediation Relief?
In order, to encourage more Brownfield development, the government introduced Land Remediation Relief in 2001, to address the market failure in bringing back into use brownfield land and building sites.
The relief was introduced as an incentive for remediating contamination from land and buildings. The aim of this relief is to remove the cost barriers associated with this expenditure by giving a 150% deduction against qualifying expenditure. The intention being to influence the behaviour of developers, and to increase the supply of developable land (in particular to allow the development of housing). However, the entitlement conditions for claiming Land Remediation and Derelict Land Relief can be complex and it is currently only available to UK registered companies.
Although this relief has been around for nearly 20 years, many developers and investors are still not sure what Land Remediation Relief is and what can be claimed.
Principally, the relief is available for the costs of dealing with contamination or specifically substances that are causing, or could cause, ‘relevant harm’. The costs must be extra over the costs, that have been incurred to directly deal with the relevant identified contamination. Costs that would be incurred as part of the normal process, construction or refurbishment would not qualify as they are not dealing with the contamination.
In addition, to the actual costs of remediating the relevant contamination, allowable expenditure will also include the costs of establishing the level of contamination (such as additional survey, testing costs), expenditure on materials, employee or subcontractor costs of dealing with the contamination. Also, additional preliminary items and professional fees incurred as a direct result of dealing with the relevant substances can also be claimed.
For more information download our guide to Land Remediation Relief.