Do I qualify?
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You can only qualify for the relief if:
You’re decontaminating land in the UK.
This has to be land that your company owns or has a ‘major interest’ in.
The cost wouldn’t have been incurred anyway.
You won’t qualify if you would have spent the money restoring the land if it wasn’t contaminated.
It was acquired in a derelict or contaminated state.
A ‘polluter pays’ policy applies to this tax relief, so you can only claim if the land was contaminated when you acquired it from a third party. One specific exception to this is the presence of Japanese knotweed, which can be spread by fly-tipping.
You acquired it for the purposes of your trade or business.
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Exclusions from the relief include:
Subsidised expenditure.
Companies are ineligible for land remediation tax relief if the contamination is caused by the company, if they do not have a “major interest” in the land if expenses were subsidised through grants, or if the acquisition cost was discounted for remediation costs.
Discounted acquisitions.
Discounted acquisitions are excluded from the UK’s land remediation tax relief as the relief is intended to incentivise the clean-up of contaminated land rather than to reward companies for purchasing contaminated land at a discount.
Expenditure on landfill tax.
Expenditure on landfill tax is excluded from the land remediation tax relief as it is considered a form of waste disposal rather than a remediation activity.
Brilliant! When do I get the relief?
The timing of your relief will depend on whether you’re claiming revenue or capital expenditure.
Revenue expenditure.
Relief is given in the accounting year that the expenditure is recognised and deducted in calculating annual profit – for instance, when work is completed and the property is sold.
Capital expenditure.
Relief is given in the accounting year that the qualifying Land Remediation spend was incurred.
Both types of expenditure.
Accounting rules state that tax returns may be amended up to 2 years after the accounting year end in question. In other words, the reliefs can be applied to an “open tax return”.
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