Property Tax — Corporation Tax

Land Remediation Relief UK — Corporation Tax Deduction for Contaminated Land

Land Remediation Relief (LRR) is a corporation tax relief available to companies that acquire contaminated or derelict land in the UK and incur costs in cleaning it up. Contaminated land: 150% deduction of qualifying expenditure against CT profits (100% standard deduction + 50% additional super-deduction). Derelict land: 110% deduction (100% + 10% additional). LRR is only available to companies within the charge to UK CT — individual landlords, LLPs with individual partners, and unincorporated businesses cannot claim. Key conditions: company must not have caused or knowingly permitted the contamination; contamination introduced by a third party; arm's length acquisition required. Qualifying contamination (HMRC CIRD60000 series): arsenic, heavy metals, VOCs, asbestos, coal tar, landfill gas, radioactive substances, Japanese knotweed. Qualifying expenditure: site investigation and sampling; excavation and disposal; in-situ remediation (bioremediation, chemical treatment, capping); contaminated groundwater treatment; demolition of derelict structures. NOT qualifying: new construction costs (separate capital allowances regime). Plant used for remediation: 100% first-year allowances in addition. Tax saving: at 19% CT — ~£28.50 per £100 qualifying expenditure; at 25% CT — ~£37.50 per £100. Land Remediation Tax Credit (LRTC): loss-making companies can surrender additional deduction to HMRC for cash payment at 19%; capped at total PAYE/NIC for the period. Scotland/Wales: UK-wide CT relief; LBTT/LTT do not provide equivalent.

10 min readUpdated 7 June 2026Last reviewed: 17 May 2026land-remediation-reliefcontaminated-land-taxcorporation-taxbrownfield-development

Contaminated Land — 150% Deduction and Qualifying Conditions

For contaminated land, the LRR deduction is 150% of qualifying remediation expenditure: 100% standard deduction + 50% additional deduction. Net CT saving: ~£28.50 per £100 at 19% CT; ~£37.50 per £100 at 25% CT. Key conditions: company (not individual/unincorporated) within the charge to UK CT; company must not have caused or knowingly permitted the contamination; contamination introduced by a third party; acquired at arm's length. Qualifying contamination (HMRC CIRD60000): arsenic, heavy metals (lead, cadmium, mercury), VOCs (solvents), asbestos, coal tar, landfill gas, radioactive substances, Japanese knotweed, radon (where legal duty to remediate). Qualifying expenditure: site investigation/sampling; excavation/disposal; in-situ remediation (bioremediation, chemical treatment, capping); groundwater treatment; directly attributable professional fees.

Derelict Land, LRTC and Claiming LRR

Derelict land: 110% deduction (100% + 10% additional); land not in productive use since 1 April 1998; cannot reasonably be made productive without demolition or decontamination. Demolition costs qualify for the 10% additional deduction. Many brownfield sites are both derelict and contaminated — 50% uplift on contaminated elements; 10% uplift on demolition-only elements. Land Remediation Tax Credit (LRTC): loss-making companies can surrender the additional LRR deduction to HMRC for a cash payment at 19%; capped at total PAYE/NIC for the period — the 'cash-back' mechanism for loss-making remediators. Claim: CT600 box 285; supporting evidence: site investigation reports; chemical analysis; contractor completion certificates; invoices; evidence of third-party contamination origin. Plant used for remediation: 100% first-year allowances in addition to LRR.

Frequently asked questions

What is Land Remediation Relief?+

Land Remediation Relief (LRR) is a corporation tax relief for companies that acquire and remediate contaminated or derelict land in the UK. Companies can deduct 150% of qualifying remediation expenditure on contaminated land (100% standard + 50% additional) and 110% on derelict land. It is not available to individual landlords — CT-only relief.

Who can claim Land Remediation Relief?+

Only companies within the charge to UK corporation tax can claim LRR. Individual landlords, LLPs with individual partners, and unincorporated businesses cannot claim. The company must not have caused or knowingly permitted the contamination — it must have been introduced by a third party before the company's acquisition.

Can a loss-making company claim Land Remediation Relief?+

Yes — via the Land Remediation Tax Credit (LRTC). A company with no CT profits can surrender the additional LRR deduction to HMRC in exchange for a cash payment at 19% of the surrendered amount. The LRTC is capped at the company's total PAYE and NIC costs for the accounting period.

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Director's Loan Account (DLA)

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