Asbestos Tax Relief
ASBESTOS TAX RELIEF
Land Remediation Relief (LRR) gives relief from Corporation Tax for companies owning residential and commercial property.
What is Land Remediation Relief?
Land remediation relief (LRR) allows a company to claim relief for qualifying expenditure incurred on remedying contaminated land, and to claim an enhanced deduction for that expenditure.
LRR is given when contaminated land has been acquired for the purposes of the trade, and qualifying expenditure is incurred on that land.
WHEN IS RELIEF AVAILABLE
The relief is available for additional costs incurred had the land not been acquired in a contaminated state.
Relief is available for the following types of expenditure:
Materials directly employed in remediating the land
Qualifying sub-contracted expenditure
The expenditure must not be subsidised.
Land is contaminated if it contains substances that are likely to cause harm, or pollution of controlled waters.
HMRC have accepted claims for the cost of asbestos removal. Legislation governs the way that asbestos is removed and as a result additional costs may be incurred in containing the asbestos and dust during removal. It is these additional costs that may qualify for LRR.
The claimant company or someone connected with them must not have caused the contamination.
Where a property sits in stock the relief is available in the year the stock is sold. Where the property sits as a trading asset the relief is available in the year the expenditure is incurred.
HOW MUCH RELIEF IS AVAILABLE?
A trading deduction of 150% is available.
Provided the conditions are met the company can claim a deduction for 100% of the capital expenditure in the year in which the expenditure is incurred.
The company can then claim a further 50% where expenditure on land remediation has been allowed as a deduction in calculating the profits.
If losses are generated, they can be surrendered and a tax credit of 16% claimed by the company from HMRC.
Hybrid Environmental Consultancy Ltd cannot offer financial advice to our clients. However, we work closely with a team of professionals who are experts in this field and they can guide you through the process and requirements that are needed, if you would like to talk through the steps for yourself or your clients, please feel free to contact us.