What is Land Remediation Relief?
Land Remediation Relief (LRR) is a UK corporation tax incentive designed to encourage the redevelopment of contaminated and derelict land. Introduced under the Finance Act 2001, LRR provides tax relief to companies undertaking remediation work to make land fit for use. This relief remains available in 2025, offering significant financial benefits to businesses in the land remediation, construction, and regeneration sectors.
Key Benefits of Land Remediation Relief
- 150% Tax Deduction: Companies can claim 150% of their qualifying remediation costs as a tax deduction. For example, if a company spends £100,000 on remediation, it can deduct £150,000 from taxable profits.
- Cash Tax Credit for Loss: Making Companies – If a company is not profitable, it can surrender the loss related to LRR for a cash tax credit of up to 24% of the expenditure.
- Supports Brownfield Development: Encourages investment in previously developed land by reducing the financial burden of site preparation.
Who Can Claim Land Remediation Relief?
To qualify for LRR, a company must:
- Be subject to UK corporation tax (individuals and partnerships are ineligible).
- Hold a major interest in the land (freehold or a lease with at least seven years remaining).
- Undertake remediation work where land is contaminated due to industrial activity and poses a risk to health or the environment.
- Not have caused the contamination (LRR does not apply if the company was responsible for the pollution).
Eligible Costs for Land Remediation Relief
Land Remediation Relief applies to a range of remediation activities, including:
- Removing in-ground contaminants such as asbestos, hydrocarbons, or heavy metals from the soil to enable development.
- Treating groundwater contamination or managing invasive species such as Japanese Knotweed or Himalayan Balsam.
- Dealing with derelict structures that require removal to enable redevelopment, such as concrete slabs, hardstanding buildings, and in-ground obstructions.
- Costs such as professional fees and materials directly linked to remediation work.
How to Claim Land Remediation Relief
Companies can claim LRR through their Corporation Tax return for the relevant accounting period. Amendments to claims are allowed within one year from the tax return filing date.
Future of Land Remediation Relief
The UK government is currently reviewing LRR to assess its effectiveness, with potential enhancements expected in the future. However, as of March 2025, the scheme remains available under existing rules.
For developers and landowners who may be thinking of developing their brownfield site, Land Remediation Relief presents a valuable opportunity to offset costs and help support project viability.
If your business is investing in contaminated land, now is the time to explore how LRR can work for you.