Land remediation tax relief gives a corporation tax deduction of 150% on qualifying expenditure incurred in decontaminating land.

The mains issues to note are: 

• This only applies to Companies

• land must be acquired by the company for the purpose of its trade or property letting business. At the time it was purchased the land must have been contaminated.

• land is “contaminated” if substances are causing harm or there is a possibility of them causing harm. This is wide in scope. This would cover for example expenditure on containing flood waters.

• The company’s expenditure is capital in nature. 

• The relief is available in the year of expenditure.

• beware in accepting grants for the expenditure as this can reduce relief.

• care needs to be taken if the company undertakes the work themselves. 

If the seller in a transaction is the polluter it may be more beneficial for the buyer to adjust the price to take into account the remediation cost and them claim tax relief on the works (reducing the net cost to the buyer) rather than ask the seller to remediate (as there is no tax relief).