Contaminated Land - 150% enhanced capital allow?

Contaminated Land - 150% enhanced capital allow?

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Client is going to spend £60K on replacing asbestos roofs.

I see that the 2001 FA introduced a 150% enhanced CA for cleaning up contaminated land (as long as the current owner didn't create the contamination).

Does this allowance still apply and if so, is it treated as a CA, which will in my client’s case create a loss? Presumably the resulting loss can be relieved in the normal way?

Any advice on this area would be gratefully received

SP

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By AnonymousUser
20th Jan 2008 10:36

Land remediation relief does still apply
Your client may be able to claim relief for the asbestos removal costs if he is in business as a company. The relief does not apply to individuals or partnerships. The land (which includes buildings) must also be in the UK.
The costs of the clean up are treated slightly differently if the land is held as stock or as a fixed asset. For an investor who holds the land as a fixed asset. Land remediation relief allows an investor to deduct the cost of cleaning contaminated land from its annual profits, and permits an additional deduction of 50 per cent of the qualifying clean-up costs. This is similar to the calculation of R&D tax relief.
Where the land remediation tax relief creates a loss for the claimant company, and that loss cannot be relieved by setting off against profits of the same accounting period or an earlier period, the company can surrender that loss and obtain a repayment of 16 per cent of the loss from HMRC.
Further details are given in the HMRC Corporate Intangibles Research and Development Manual, para.60000+

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By User deleted
21st Jan 2008 14:16

thanks Rebecca
that's a great help.

The client is a limited Co and the building is situated in the UK, so it appears they will qualify for the 150% deduction. I suspect that there will be sufficient profits in the current year to obtain full relief but thank you for the advice on the credit otherwise.

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