Land Remediation Relief is available to businesses who restore contaminated or derelict land such as former industrial land or brownfield sites.
The relief from corporation tax is designed to encourage businesses to redevelop land which would normally be prohibitively expensive to clear of contaminants such as oil, fuel or other chemicals.
Natural contaminants do not qualify for the tax relief except for arsenic, radon and Japanese knotweed; being the only three natural exceptions.
Other similar unwanted plants such as Giant Hogweed or Ragwort do not qualify for Land Remediation Relief.
This means that if the land owner was responsible for the contamination of the land they will not be eligible for Land Remediation Relief. For example, an industrial site has been used for several decades and over that time the land has become contaminated.
The land has become derelict and the owner decides to build houses on the land. However since the land was in their ownership whilst it was being contaminated, they cannot claim Land Remediation Relief as they are ‘the polluter’.
Similarly, a person buys land with a minor Japanese knotweed growth and makes no effort to clear or control the growth. Years later they decide to clear the land but will not be able to claim Land Remediation Relief because they are responsible for the spread of the knotweed.
In the presence of Japanese knotweed mortgage providers are becoming increasingly reluctant to offer mortgages until the problem has been resolved.
( Read our other story on: how to get your mortgage deal back. )
It is more important than ever to consult a Japanese knotweed contractor in order to completely clear the site before any building work begins. As long as you are not responsible for the planting or spread of the weed, or providing you have not purchased the land from a relative or associate, you should be eligible for Land Remediation Relief. It should also be noted that consultation fees, providing they are followed by decontamination, can also be reclaimed.
Unfortunately, Land Remediation Relief is not available to home owners who are blighted with Japanese knotweed as the tax relief is intended to bring derelict land back in to use by redevelopers.
If you are a property developer and have purchased derelict land which was in a contaminated state at the time of purchase, then you should be eligible to reclaim at least some of the clearance and consultation costs for removing Japanese knotweed along with other artificial contaminants such as oil, diesel or other chemical leaks.
If you are unsure, contact your local council or check with a Japanese knotweed consultant for specific advice.
In the recent wave of government cuts, Land Remediation Relief was earmarked for abolition.
However, after an in-depth consultation, the government found that Land Remediation Relief was still necessary as it played an important role in getting brownfield sites redeveloped. The alternative being developing greenfield sites which is not favourable. According to the treasury around 1,300 companies a year claim relief worth an estimated £40 million.
Without Land Remediation Relief, the redevelopment of many brownfield sites would be financially unviable which would mean more derelict sites remain in their current state whilst the green belts around our towns and cities would slowly and surely be eaten up.