06/12/2022

Tax

Land Remediation Relief
(LRR)

Are you entitled to 150% tax relief on your land remediation costs?

Removing asbestos as part of a renovation project, cleaning up brownfield sites for development, or even eliminating knotweed from your grounds often involves costly remediation work, like risk assessments, decontamination and the removal of invasive plants, hazardous material and buried structures.

However if you’re a UK commercial owner occupier, investor, life assurance company or developer, who has acquired a major interest in a contaminated or derelict site, you could benefit from Land Remediation Relief (LRR).

LRR was introduced as an incentive to clear contaminated land by removing cost barriers – in turn increases the supply of developed land to meet housing needs. What LRR could mean to you is that costs incurred from your remediation work may entitle you to corporation tax relief of up to 150% of that expenditure.

A digger working on land which lets them claim and land and remediation (L&D) relief

What costs are covered?

LRR includes business expenditure on a range of essential remediation services. These include everything from preparatory costs, risk assessments, staffing costs and materials to services contracted out and sub-contracted expenditure, such as asbestos removal, remediation works, survey fees and environmental consultancy fees.

Can I claim?

Land and buildings must be in the UK, and must have been acquired for your own business purpose or for property rental (investment). You must also be a freeholder or long leaseholder. The land must have been contaminated at the time of acquisition, as a result of previous industrial activity, which isn’t connected to you.

Investors (for example, landlords) and owner-occupiers must claim within two years from the period of expenditure, with an LRR rate is 150% of qualifying costs. Developers can also claim in the year of expenditure but have a four-year time limit and the LRR rate is 50% of qualifying costs.

Person removing plants and checking if they can claim land and remediation (L&R) relief

How we can help

Claiming LRR is simple. Once you have completed our fact-finding questionnaire, we’ll assess your eligibility, arrange a technical meeting and review your eligible expenditure. The claim is made through your company tax return, following the end of the accounting year. We’ll prepare the LRR report to satisfy HMRC, which will be attached to the tax return.

If you have any questions on Land Remediation Relief, please get in touch.

You can read the Frequently Asked Questions related to LRR here.

Get your FREE LRR guide to LRR.