Busy day for HM Treasury - LRTR Consultation Launched

HM Treasury is seeking input from the UK property and construction sectors on reforming Land Remediation Tax Relief (LRTR) in a new consultation.

The relevant Property Tax law is set out in the primary legislation at Part 14 of the Corporation Tax Act 2009 and associated Statutory Instruments.  The relief currently provides an additional 50% deduction for eligible revenue expenditure on top of the 100% deduction normally available for revenue expenditure, and a 150% deduction for eligible capital expenditure.  Capital expenditure that is eligible for capital allowances is not claimable under LRTR.

The consultation seeks to explore the viability and effectiveness of some proposed reform options - both collectively and in isolation.

HM Treasury also ask a range of questions about how well the options might address the identified shortcomings, possible issues with the proposed approaches, implications for different types of businesses and developers, and details of technical implementation such as scope and eligibility criteria.

The government believes this reform would simplify the process of claiming LRTR and allow developers to claim LRTR on an Expanded List of Eligible Contaminants, with the Local Authorities continuing to determine what remediation activity needs to take place through the existing planning processes...

The government would look to retain a streamlined list of contaminants that would be eligible...

The leopard though, not changing its spots...  as certain elements would remain excluded, including compulsory remediation and remediation relating to water and air which fall within environmental definitions, but are not in scope of the reforms the government is considering as a part of this consultation.

The consultation closes at 23:59Hrs on 21 September 2026

Our team of property taxation specialist can also advise on any impacts to current, recent or forthcoming projects where contamination or derelict land may be a major barrier to development or regeneration.

Get in touch if you wish to augment our response to the consultation with any specific issues, queries for examples of how the proposals could help to accelerate housing deliver - or impede and complicate!

Otherwise, if you would like to discuss any property tax matters or specific queries relating to the above information, then please do contact the team on 0345 230 6450 or [email protected].  We look forward to speaking with you soon.