The short answer
Land Remediation Relief is a UK Corporation Tax relief for companies cleaning qualifying contaminated land or bringing certain land derelict since 1 April 1998 back into use. It provides a total deduction of 150% of qualifying expenditure; a qualifying land-remediation loss may instead be surrendered for a cash credit at 16% of the loss surrendered. Company, land, acquisition, polluter, cost and claim conditions all apply.
What is Land Remediation Relief?
Land Remediation Relief is a UK Corporation Tax relief for companies that incur qualifying expenditure bringing contaminated land, or certain long-term derelict land, back into productive use. Where the conditions are met, the company receives its normal 100% deduction plus an additional 50% deduction: a total deduction of 150% of qualifying expenditure.
The relief is deliberately narrower than the everyday meaning of “brownfield remediation”. The company, land interest, contamination or dereliction, work, cost and claim route must each satisfy specific conditions. The “polluter pays” principle also prevents the party responsible for the problem from receiving the incentive.
Current-law note
At 5 September 2026, the existing relief remains in force. HM Treasury is consulting on possible reforms, with responses due by 21 September 2026 and any change subject to a later decision and legislation. The proposals are not applied as current law in this guide.
Who can claim?
Land Remediation Relief is a Corporation Tax relief. It is not directly available to an individual or ordinary partnership, although a company that is a member of a partnership can potentially elect in respect of its share where the statutory conditions are met.
- 01
A company within Corporation Tax
The claimant must be a company and must incur or bear the qualifying cost.
- 02
A major interest in UK land
Ownership qualifies. A lease granted for at least seven years, or an assigned lease with at least seven years remaining, can also be a major interest.
- 03
Land acquired in the relevant state
The company generally needs to acquire the land from another party when it is already contaminated or derelict. Japanese knotweed has a specific exception to the acquisition-date condition.
- 04
No responsibility for the problem
The claimant or a connected party must not have caused the contamination or dereliction, and continuing or failing to address a problem can affect this test.
- 05
Qualifying, unsubsidised expenditure
The work and cost must fall within the rules and must not be met by a grant, compensation or another person.
What is contaminated land for this relief?
For expenditure incurred from 1 April 2009, HMRC’s central rule is land contaminated as a result of former industrial activity where substances are causing, or pose a serious possibility of causing, relevant harm. The legislation also specifically extends relief to naturally occurring arsenic and arsenical compounds, radon and Japanese knotweed; apparently similar hazards do not qualify merely by analogy.
Potentially within scope
- Asbestos in or on the land or buildings.
- Hydrocarbons, oils, chemicals and heavy metals from former industrial use.
- Contaminated soil or groundwater requiring treatment.
- Naturally occurring arsenic or radon under the specific rules.
- Japanese knotweed treated by a qualifying method.
- Measures that prevent qualifying substances causing harm.
Not automatically within scope
- Every environmental hazard or invasive species.
- Ordinary site clearance and levelling.
- A hole, void or unstable ground without a harmful substance.
- General demolition for a new development.
- Contamination caused by the claimant or a connected party.
- Japanese knotweed removed to landfill by an excluded “dig and dump” method.
The facts at acquisition matter. Due-diligence reports, environmental surveys, historic use and the chronology of discovery should establish what was present, what caused it and when the company became aware of it.
When does derelict land qualify?
Derelict land is a separate route introduced for expenditure from 1 April 2009. Under the current rules, the land must have been derelict since 1 April 1998 and be incapable of productive use without removing specified structures. Vacant, underused or commercially unattractive land is not necessarily derelict for this purpose.
The qualifying works list is precise. It currently covers removal of post-tensioned concrete heavyweight construction, building foundations and machinery bases, reinforced-concrete pile caps, reinforced-concrete basements, and below-ground redundant gas, water, drainage, sewerage, electricity or telecommunications services. Closely related work does not qualify automatically.
Evidence of long-term dereliction
HMRC may accept relevant national land-use records, but inclusion in a database is not the only route. Historic surveys, photographs, planning records, title information, site reports and evidence of continuous condition can support the position. The evidence needs to address the 1 April 1998 test, not only the date the company acquired the site.
Which costs can qualify?
The expenditure must arise only because the land is contaminated or derelict, or the main purpose of the work must be relevant land remediation. A general development cost does not become eligible simply because it appears in the same contract.
| Cost area | Potentially qualifying treatment | Boundary to document |
|---|---|---|
| Further investigation and risk assessment | Tests to establish the level of suspected contamination or the nature and condition of specified derelict structures can qualify if relevant remediation then proceeds. | An initial desk study that would have been undertaken for planning regardless of contamination does not qualify. |
| Direct remediation works | Treatment, containment or removal of qualifying contamination, including relevant soil, water, building and protective works. | Separate ordinary earthworks, construction, landscaping and improvements that would have happened anyway. |
| Derelict structures | Relevant preparation and the specific removal works listed in secondary legislation. | General demolition and removal of unlisted structures do not qualify by analogy. |
| Employees and materials | Relevant employee costs for people directly and actively engaged in remediation and materials used in the qualifying work. | Support staff, benefits in kind and time outside the remediation need separate treatment; statutory time-band rules apply to employees. |
| Subcontractors and professional fees | Payments for qualifying subcontracted remediation and advice on how to remove the contamination or qualifying derelict structures. | Contracts, connection status, who bears the cost and the underlying activities determine the amount. |
| Preliminaries and site-wide costs | Only the additional amount incurred specifically because of contamination or dereliction may qualify. | A simple percentage allocation of general security, site services or temporary works is not enough. |
What expenditure is excluded?
Common exclusions are just as important as the headline 150% deduction.
Conditions to test before calculating
- The claimant or a connected party did not cause the contamination or dereliction.
- No responsible polluter retains an interest that blocks the relief.
- The work is not excluded solely because it follows a specified statutory notice or obligation.
- The expenditure is not met by a grant, subsidy, seller contribution, insurance or compensation.
- The cost would not have been incurred anyway as part of the ordinary development.
- The company, rather than a landlord, tenant, authority or contractor, bears the relevant cost.
- The remediation method itself is within the rules.
- No other tax relief is being claimed incompatibly on the same amount.
A partial grant or compensation payment does not necessarily remove all relief, but it reduces the expenditure borne by the company. The remaining amount must still satisfy every other condition. If compensation is agreed after a claim, the claim may need to be revised.
How much is Land Remediation Relief worth?
The company receives a total deduction equal to 150% of qualifying expenditure. Where this contributes to a qualifying land-remediation loss, the company can potentially surrender some or all of that loss for a cash credit equal to 16% of the loss surrendered.
Profitable company
£100,000 × 150% = £150,000 total deduction
At a 25% Corporation Tax rate, the simplified tax reduction is £37,500. Where the original £100,000 would already have been deductible, the extra 50% enhancement contributes £12,500 of that amount.
Loss surrendered for credit
£150,000 × 16% = £24,000 cash credit
This assumes the whole £150,000 is a qualifying land-remediation loss available and chosen for surrender. The surrendered loss is no longer available to carry forward.
| Qualifying expenditure | £100,000 |
|---|---|
| Total 150% deduction or qualifying loss generated | £150,000 |
| Tax-credit rate | 16% of the qualifying loss surrendered |
| Maximum credit in this simplified example | £24,000 |
The 16% is not simply applied to remediation invoices. It is applied to the qualifying land-remediation loss surrendered. Existing trading results, capital-versus-revenue treatment, available losses, group position and the choice between surrendering and carrying losses forward can change the outcome.
How is the relief claimed and what are the deadlines?
The claim is made through the Company Tax Return and supporting computation. Capital expenditure can be treated as a deductible amount only where the company makes the required election.
- 1
Establish entitlement
Document the company, major interest, acquisition, polluter, contamination or dereliction and subsidy position.
- 2
Isolate the costs
Reconcile qualifying employees, materials, contractors, professional fees and incremental site costs to the ledger.
- 3
Make any capital election
The written election must specify the accounting period and be made within two years after that period ends. HMRC accepts timely computations reflecting the election.
- 4
File the return or credit claim
A tax-credit claim is made in the original or amended return and must normally be made by the first anniversary of the return’s filing date.
Those deadlines are not interchangeable. The two-year limit applies to the election that treats qualifying capital expenditure as a deduction. The payable tax-credit claim has its own deadline linked to the filing date of the relevant Company Tax Return. Late credit claims depend on HMRC allowing them.
What evidence should a claim contain?
Land and technical evidence
- Title, lease and acquisition documents.
- Historic uses and condition at acquisition.
- Desk study followed by intrusive surveys and risk assessments.
- Contaminants, pathways, receptors and chosen remediation method.
- Plans, method statements, waste records and validation reports.
- For derelict land, continuous-condition evidence and specified works.
Financial and tax evidence
- Invoices, contracts and general-ledger reconciliation.
- Employee activity and time allocation.
- Subcontractor and connected-party analysis.
- Incremental-cost methodology for preliminaries.
- Grants, contributions, insurance and compensation.
- Capital election, computation, loss and credit calculations.
Environmental evidence and tax evidence should tell the same story. The contamination identified in the reports should connect to the work carried out, the invoices included and the statutory route used in the computation.
Is Land Remediation Relief changing?
HM Treasury opened a further consultation on 13 July 2026 after concluding that the current relief was not fully meeting its objective. The options include closer alignment with planning processes, changes to the treatment of derelict land and measures addressing the timing of relief for developers.
The consultation closes on 21 September 2026. The government says it intends to set out its conclusion at Budget 2026 and would legislate through Finance Bill 2026 only if it decides to proceed. Until enacted legislation changes the rules, claims should be prepared under the current conditions described above and reviewed again before filing if the law changes.
For a review of your site, costs and eligibility, explore our Land Remediation Relief service.
Frequently asked questions
Can an individual property developer claim?
Not directly. Land Remediation Relief is a Corporation Tax relief for companies. A company within a partnership can potentially elect for its share of partnership expenditure where it satisfies the conditions.
Does every brownfield site qualify?
No. Brownfield is a planning description, not the tax test. The land must meet the statutory contaminated-land or long-term-derelict-land conditions, and the claimant, acquisition, polluter, cost and work requirements must also be satisfied.
Can asbestos removal qualify?
Potentially. Asbestos can be a contaminating substance, and the additional costs of protective work and removal may qualify where the wider conditions are met. Ordinary demolition, replacement construction and costs met by another party should be separated.
Can Japanese knotweed treatment qualify?
Potentially, including where it appeared after acquisition through natural spread or fly-tipping. The claimant must act appropriately so it is not treated as the polluter, and removal to landfill by the excluded “dig and dump” method does not qualify for expenditure from 1 April 2009.
Can a landlord claim for contamination caused by a tenant?
Specific restrictions can apply where a tenant caused the contamination, and responsibility, connection and retained interests must be reviewed. The party paying for remediation does not automatically become entitled to the relief.
Can subsidised remediation costs qualify?
Not to the extent another person, a grant, subsidy, insurance recovery or compensation meets the cost. A balance genuinely borne by the company may still qualify if it meets all other conditions.
Is the payable credit 16% of remediation expenditure?
No. It is 16% of the qualifying land-remediation loss surrendered. Where £100,000 of qualifying expenditure creates a fully surrenderable £150,000 qualifying loss, the simplified maximum credit is £24,000.
Check the detail
Sources & scope
United Kingdom Corporation Tax. This guide explains the rules in force at 5 September 2026 for expenditure under the post-1 April 2009 regime. HM Treasury is consulting on possible reforms until 21 September 2026, but those proposals are not current law. Earlier expenditure, statutory notices, partnerships, REITs, connected parties, landlord/tenant cases and later legislative change can require different analysis.
This is an InnoFund explanation, not official guidance or advice on a particular claim. The facts, relevant law and applicable scheme rules must be considered together.
Sources checked: 5 September 2026. This is separate from expert sign-off.
- HMRC Business Income Manual: Land Remediation Relief
Corporation Tax scope and 100% plus 50% deduction
- HMRC: Acquiring land
CIRD60051; major interest, acquisition condition and Japanese knotweed exception
- HMRC: Polluter-pays exclusions
CIRD60120; responsibility and connected-party rules
- HMRC: Major interest in land
CIRD69015; ownership and seven-year lease tests
- HMRC: Expenditure because of contamination or dereliction
CIRD63100; incremental cost and main-purpose conditions
- HMRC: Preparatory activity
CIRD63215; qualifying investigation and initial desk-study boundary
- HMRC: Professional fees
CIRD63225; remediation advice and subcontractor treatment
- HMRC: Subsidised expenditure
CIRD63130; grants, contributions and compensation
- HMRC: Long-term derelict land
CIRD62010; continuous dereliction since 1 April 1998
- HMRC: Qualifying works on derelict land
CIRD62035; specified removal works
- HMRC: Capital expenditure election
CIRD60075; written election and two-year deadline
- HMRC: Amount of Land Remediation tax credit
CIRD68025; 16% of qualifying loss surrendered
- HMRC: Land Remediation tax-credit claims
CIRD68030; Company Tax Return and filing-date deadline
- HM Treasury: Reforming Land Remediation Relief consultation
Proposals open 13 July to 21 September 2026; not current law