Japanese knotweed is a nuisance at the very least. It can break through foundations, ruin building structures and be extremely difficult and expensive to remove. Amazingly, in 2012 the organisers for the London 2012 Olympic Games spent an estimated £130m to eliminate the plant from an infested patch in east London.
For real estate developers and investors, this cost would be a huge detraction when purchasing or developing contaminated land. If you own land which is affected by this destructive force, the costs to remove it can be high but tax relief may be available.
Land remediation relief provides a corporation tax deduction up to 150 per cent of qualifying expenditure incurred to restore land in a contaminated or derelict state.
In addition to Japanese Knotweed, it can also apply to naturally occurring arsenic or radon build up, or land you acquire in a contaminated or derelict state as a result of industrial activity undertaken by a previous owner.
Qualifying categories may include:
- preliminary costs such as consultancy fees for site investigations, risk assessments and the development of remediation strategies;
- staff, material and sub-contractor costs; and
- capital expenditure used in the remediation process.
As the relief must be actively claimed, it is often missed. You could also factor in the potential tax savings at the purchasing bid stage to enhance your bids accordingly.
We can help you ensure that remediation expenditure is identified and suitable claims for corporation tax relief are made.