In these times of economic crisis, obtaining extra value from a land purchase is a bonus. Don't forget about Land Remediation Relief which is a tax relief for spending money on cleaning up contaminated land or bringing derelict land back into use.
What is LRR and who qualifies?
As LRR is a relief from corporation tax, it is not available to individuals or partnerships. LRR can give you a 100% deduction against capital expenditure, and a 50% deduction against revenue expenditure. This is in addition to the deduction for expenditure that would be available to the company under normal tax principles.
What sort of land qualifies?
As you would expect, there are detailed conditions to be met. In particular, you would need to check that the land is "in a contaminated state" as defined by the legislation.
The land must also be contaminated when you buy it, unless the contamination is caused by Japanese Knotweed, where the contamination can occur after your purchase. This is because, interestingly, Japanese Knotweed can be spread by fly tipping.
Since the Council run recycling centres have been closed over Lockdown, fly tipping has been on the increase, so your qualification for the tax relief is definitely worth checking.
So, make sure you investigate if is there is any possibility your land purchase may be contaminated. There may turn out to be a silver lining ...
Our lawyers can help your business manage its taxes and resolve HMRC disputes as efficiently as possible. For further information visit the Business Tax section of our website.