Land remediation relief (LRR) – can you claim it?
If your company purchases contaminated or derelict land you may be eligible for enhanced tax relief or a tax repayment.
If your company purchases contaminated land or buildings for the purpose of its trade or for rental then it may qualify for LRR on expenditure incurred in cleaning up the land. This is a particularly attractive relief as an enhanced tax deduction of 150% of actual spend is given - or a tax credit payment of 24% of spend is made if the company is making tax losses. Draft proposals have been made to widen of the scope of LRR to include long term derelict land, and will take effect from 1 April 2009, if enacted. This will give rise to further opportunities for claims where the contamination arose from previous industrial use.
It is also now possible to claim the relief for the removal of Japanese Knotweed in any tax returns which are still 'open' provided certain conditions are met -so it may be worth checking to see if a claim can now be made.
The list of contaminated substances includes; asbestos, oil spillages, arsenic and radon. Act now to ensure you are making use of all ways to reduce your tax liabilities and effective tax rate and improve cash flow.
For further advice contact your local Mazars tax expert.