Edge of Tomorrow - Land remediation tax relief: ten years on

Ten years on, from the introduction of Land Remediation Tax Relief (LRTR) for remediating contaminated or long-term derelict sites does tax policy modify behaviour to drive housing growth and regeneration?

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Land Remediation Tax Relief (LRTR) gives between 50% and 150% relief to UK Corporation tax payers on their costs in remediating contaminated or long-term derelict sites.  Tax payers annually claim £30m of LRTR, but could or should it be more?


Ten years on, does tax policy modify behaviour to drive housing growth and regeneration?  Housing is a complex issue with no quick fixes, but LRTR provides a valuable contribution (up to 28.50% of remediation costs) to help bring polluted or brownfield sites back into economic use. 


However, the dereliction criteria needs rebasing to enable the rules to stay relevant & effective.


Typical estimates for UK housing need suggests that 200-300,000 new houses should be built each year to address the country’s shortage.  The Campaign for the Protection of Rural England report “State of Brownfield 2018” found that some 1.1million brownfield plots exists across the Local Planning Authorities (LPAs) in England.  Whilst 33% have planning permission, too many LPAs still consider ‘green belt’ development, before exhausting the options to repurpose brownfield sites.


To address the myopia within the real estate sector, the Government introduced Land Remediation Tax Relief (LRTR) via s.70 FA2001; making redevelopment potentially more economically viable by reducing the cost of decontamination; levelling the ‘playing field’ with ‘green belt’ sites from May 2001.  Later, under the auspices of the Tax Law Re-write Project, it becoming Part 14 Corporation Tax Act 2009 (CTA2009) and was extended to include remediation of long-term dereliction, effective from April 2009.  


Ten years on is LRTR still delivering regeneration of our towns, cities and former industrial sites?


This article was published in Tax Journal in June 2019.

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