Corporation Tax Act 2009

Chapter 2 Reliefs for expenditure on contaminated land

1147 Deduction for capital expenditure

(1) A company is entitled to relief for an accounting period if conditions A, B and C are met.

(2) Condition A is that land in the United Kingdom is, or has been, acquired by the company for the purposes of a UK property business or a trade carried on by it.

(3) Condition B is that at the time of the acquisition all or part of the land is or was in a contaminated state.

(4) Condition C is that the company incurs capital expenditure which is qualifying land remediation expenditure in respect of the land.

(5) For the company to obtain the relief it must make an election.

(6) The relief is that for corporation tax purposes the capital expenditure is allowed as a deduction in calculating the profits of the UK property business or the trade for the period in which the expenditure is incurred.

(7) For the purposes of this section capital expenditure incurred for the purposes of a UK property business or a trade by a company about to carry on the business or trade is to be treated as incurred by the company—

(a) on the first day on which it does carry it on, and

(b) in the course of doing so.

(8) Relief is not available under this section in relation to so much of the qualifying land remediation expenditure as represents capital expenditure in respect of which an allowance has been, or may be, made under the enactments relating to capital allowances.

1148 Election under section 1147

(1) An election under section 1147 must specify the accounting period in respect of which it is made.

(2) The election must be made by notice in writing to an officer of Revenue and Customs.

(3) The notice must be given before the end of the period of two years beginning immediately after the end of the accounting period to which the election relates.

1149 Additional deduction for qualifying land remediation expenditure

(1) A company is entitled to corporation tax relief for an accounting period if each of conditions A to D is met.

(2) Condition A is that land in the United Kingdom is, or has been, acquired by the company for the purposes of a UK property business or a trade carried on by it.

(3) Condition B is that at the time of acquisition all or part of the land is or was in a contaminated state.

(4) Condition C is that the company carries on a UK property business or a trade in the accounting period.

(5) Condition D is that the company incurs qualifying land remediation expenditure in respect of the land which is allowable as a deduction in calculating for corporation tax purposes the profits of the business or the trade for the period.

(6) For the company to obtain the relief it must make a claim.

(7) The relief is an additional deduction in calculating the profits of the business or the trade for the period.

(8) The amount of the additional deduction is 50% of the qualifying land remediation expenditure.

1150 No relief if company responsible for contamination

A company is not entitled to relief under this Chapter in respect of expenditure on land all or part of which is in a contaminated state if the land is in that state wholly or partly as a result of any thing done, or omitted to be done, at any time by—

(a) the company, or

(b) a person with a relevant connection to the company (see section 1178).