LRR – what is this?
Land Remediation Relief (LRR) is a tax relief against Corporation Tax. Originally Land Remediation Relief was introduced by the government in 2001 designed to encourage the development of brownfield sites to get them back into productive use after being contaminated.
In 2009, the incentive was extended to help encourage the redevelopment of long-term derelict land. The main goal being to clean up and make safe land that had been polluted due to activities such as mining, quarrying and property construction.
Companies in the UK can claim for LRR retrospectively, up to 4 years for developers and 2 years for investors.
WHAT IS CONTAMINATED LAND?
Land or buildings become contaminated when there is a contamination present as a result of activities that deem it as harmful, or there is a serious risk that it could cause harm such as pollution of groundwater, streams, rivers or coastal waters. Examples being asbestos, radon, arsenic, Japanese knotweed, buried structures and redundant services, and harmful organisms. Many derelict buildings contain asbestos which leaks into the ground when the building is brought down.
Why is LRR so important for land investors?
Today, there are fewer greenfield sites available for development due to increased planning restrictions and reduced site availability, so developers are increasingly having to consider the potentially more challenging brownfield sites; many of which might have contamination and/or dereliction issues. But regeneration and development of these sites comes at a cost, which the government can assist with through LRR, and sadly, too many companies are either unaware of this vital tax relief or view it as additional paperwork that is not worthwhile. Often accountants simply do not know enough about it in order to either recommend or process a tax claim.
Qualifying conditions
Common examples of qualifying contamination and measures to remove or mitigate the risks include:
- Asbestos e.g. roofing panels – complete removal or capping / encapsulating qualifies
- Sulphate contamination in soil and concrete
- Hydrocarbon contamination e.g. fuels, oils etc. or dealing with disused tanks
- Any pollution from previous industrial activity e.g. heavy metal contaminants from industrial processes
- Ground / landfill gases – any protection measures e.g. membranes / ventilation systems required in buildings or foundations
- Japanese knotweed infestation
- Radon protection measures
- Arsenic contaminants found in soils
- Removal of redundant utility services and concrete foundations on sites or part of sites derelict since April 1998
Helping you to claim
Environment Controls has partnered with a leading UK consultancy specialising in analysing expenditure incurred on the remediation of acquired land and buildings and advising on costs that can be reclaimed. They can process your application in a matter of days. Get in touch to find out more by using the contact form below.