Land remediation relief

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Gateley Capitus

If you are developing or managing commercial property assets, land remediation relief can help property investors improve their cash flow and profitability.

What is land remediation relief?

Introduced in 2001, land remediation relief is a generous tax incentive for property trading companies’ and property investors to encourage the clean-up of brownfield and contaminated sites and bring long-term derelict land back into economic use for commercial property. The relief may be available on any site which has contamination present from previous industrial activity but also some naturally occurring substances are eligible which could include less developed sites.

The tax relief is calculated at a generous rate of 150% of qualifying expenditure which means for property traders an additional 50% benefit is realised and when maximised can make a significant cash flow contribution to the development’s costs and help improve profitability to a commercial property. The additional 50% is available to claim when the land or property is sold. Property investors can claim the full 150% in the year in which the expenditure was incurred. In cash terms this is very beneficial.

The land remediation relief is available to companies which are subject to UK corporation tax.

How can we help maximise the available tax reliefs for property investors through land remediation relief?

Our mix of surveying, tax and accounting experience and expertise enables Gateley Capitus to maximise the available tax reliefs and prepare robust land remediation relief claims for submission to HMRC if required.

We will analyse applicable expenditure, perform the required apportionments and calculations before preparing a fully disclosed claim document which sets out the legal basis and all qualifying expenditure of the land remediation relief claim for property investors.

We can take you through the entire process of a land remediation relief claim. The purchase of land and buildings for commercial property development can be complex and any entitlement to claim land remediation relief may be overlooked. We can give contract advice to avoid losing entitlement to the relief. We can help assess the costs for property investors and the likely benefit of making a claim.
Our team can also advise on the practical taxation and accounting aspects of land remediation relief ensuring our clients maximise the relief in an efficient manner in future financial periods.

Take a look at how we helped a property trader:

Project: Redevelopment of former gas works and petrol station 
Total groundworks expenditure: £2.8m 
Total land remediation relief deduction: £1.05m 
Additional tax saving @ 19%: £66,500

Our complete service comprised an initial no-cost assessment of the site at pre-contract stage. Then, working with the on-site remediation contractors, we gathered all relevant remediation cost information which was reconciled to the client’s accounts. Finally, we prepared a fully disclosed land remediation relief valuation report, with supporting information, suitable for appending to the client’s tax return.

Got a question? Get in touch.