Understanding Land Remediation Relief (LRR) in the UK 🌍
Are you a UK business dealing with contaminated or derelict land? You might be eligible for Land Remediation Relief (LRR)! Here’s a quick rundown:
What is Land Remediation Relief (LRR)?
Land Remediation Relief (LRR) is a valuable tax incentive designed to encourage companies to clean up contaminated or derelict land. This relief allows businesses to claim 150% of the qualifying expenditure incurred in the remediation process against their taxable profits. It not only helps improve environmental conditions but also reduces the financial burden on companies undertaking such projects. LRR can be particularly beneficial for businesses involved in redevelopment or repurposing of brownfield sites, making previously unusable land viable for new projects and contributing to sustainable development.
Who is Eligible?
To qualify for LRR, your company must:
1. Own the land – You must own the freehold or have a leasehold interest in the land.
2. Incur qualifying costs – These include expenses related to:
– Removing contaminants such as asbestos, heavy metals, or chemicals.
– Treating Japanese knotweed or other invasive plant species.
– Demolishing existing structures to prepare the land for development.
3. Have a trade – Your company must be trading and intend to use the land for trading purposes.
Key Benefits:
- It can claim the costs of dealing with the acquired contamination as 150% revenue deduction against the company turnover thereby reducing the Corporation Tax Relief.
- It can claim a tax credit of 16% of the deduction as a payment from HMRC if loss-making (restricted if not fully loss-making).
There is a limited time to make a claim from the end of the accounting period.
If you feel your company may be eligible to make a claim or you had to prepare a Remediation strategy for the work required then contact our tax manager at goslingp@riverviewportfolio.co.uk to arrange an initial conversation.
