CIRD60015 - Remediation of contaminated land: entitlement: summary

A company satisfying the conditions set out in CIRD60020 may claim land remediation relief when it incurs qualifying land remediation expenditure (see CIRD60145 for definition) that is allowed as a deduction in computing its Schedule D Case I or Schedule A profit (or loss). The relief is given as a deduction in the company's Schedule D Case I or Schedule A tax computation for the accounting period in which the qualifying land remediation expenditure is allowed as a deduction, (FA01/SCH22/PARA12 and FA01/SCH22/PARA13).

Individuals and partnerships

The relief is not available to individuals or partnerships. However, a company that is a member of a partnership can claim relief in respect of its share of the partnership's qualifying land remediation expenditure, provided it satisfies the relevant conditions (see CIRD60020).

Amount of relief

A valid claim results in additional relief equal to 50% of the qualifying land remediation expenditure.

Example 1

Company A acquires contaminated land as trading stock of its property dealing trade. The company incurs £50,000 qualifying land remediation expenditure in the accounting period that is an allowable revenue deduction in its P & L account. It can claim a further deduction of £25,000 in its Case I tax computation, giving it a total enhanced deduction of £75,000 for the accounting period.

Example 2

Company B acquires contaminated land as a fixed capital asset of its trade or Schedule A business. The company incurs £50,000 capital expenditure on qualifying land remediation in an accounting period. Provided it makes an election for the capital expenditure to be allowed as a deduction for tax purposes (see CIRD60035), it can claim a further deduction of £25,000, giving it an enhanced deduction of £75,000 in its Case I or Schedule A tax computation for the accounting period.

Guidance

The following guidance on entitlement to land remediation relief covers:

• Relevant conditions (see CIRD60020).
• Exceptions (see CIRD60025).