CIRD60035 - Remediation of contaminated land: deduction for capital expenditure: summary

A company satisfying the conditions in CIRD60040 can elect that capital expenditure on qualifying land remediation expenditure is allowed as a deduction in computing the taxable profits of its trade or Schedule A business (FA01/SCH22/PARA1 and FA01/SCH23/PARA1). The deduction is allowed in the tax computation for the accounting period in which the capital expenditure is incurred.

Example

Company A operates a chain of supermarkets in the UK. It acquires contaminated land on which to build a new store and incurs £50,000 capital expenditure on qualifying land remediation in an accounting period. The company, on making the appropriate election, is entitled to a deduction of £50,000 in computing its Case I profit (or loss) for CT purposes. The company can also claim land remediation relief in respect of the expenditure (see CIRD60015), giving it an enhanced deduction of £75,000 in its Case I tax computation for the accounting period.

Exceptions are detailed in CIRD60055.

Individuals and partnerships

The deduction is not available to individuals or partnerships. However, a company that is a member of a partnership can make an election in respect of its share of the partnership's qualifying land remediation expenditure, provided it satisfies the relevant conditions (see CIRD60040).

Guidance

The following guidance on the deduction of capital expenditure covers:

• Relevant conditions (see CIRD60040).
• When capital expenditure is incurred (see CIRD60045).
• Pre-commencement capital expenditure (see CIRD60050).
• Exceptions (see CIRD60055).
• Elections (see CIRD60060).
• CGT (see CIRD60065).