Part 14Remediation of contaminated F1or derelict land
Chapter 1Introduction
Introductory
1143Overview of Part
1
This Part provides for corporation tax relief for expenditure on land in the United Kingdom, where the expenditure is incurred for the purpose of remedying contamination F5or dereliction of the land.
2
The reliefs available under Chapter 2 are—
a
a deduction in calculating the profits of a UK property business or a trade carried on by a company for expenditure which is capital expenditure, and
b
an additional deduction for expenditure which is allowed as a deduction in calculating the profits of such a business or trade.
3
Chapter 3 provides for the payment of tax credits (“land remediation tax credits”) where a company—
a
obtains relief under Chapter 2, and
b
makes a loss in a UK property business or a trade.
4
Chapter 4 contains provision about—
a
the relief available to a company which carries on F19basic life assurance and general annuity business, and
b
the payment of tax credits (F20“BLAGAB tax credits”) to such a company.
5
Chapter 5 contains an anti-avoidance provision dealing with artificially inflated claims for relief under this Part or tax credits.
6
Chapter 6 contains supplementary provision, including definitions.
7
For information about the procedure for making claims under this Part see Schedule 18 to FA 1998, in particular Part 9B (claims relating to remediation of contaminated F6or derelict land) of that Schedule.
Basic definitions
1144“Qualifying land remediation expenditure”
1
For the purposes of this Part a company's “qualifying land remediation expenditure” means expenditure incurred by it in relation to which each of conditions A to F8F is met.
2
Condition A is that it is expenditure on land all or part of which is in a contaminated state (see section 1145) F9or a derelict state (see section 1145A).
3
Condition B is that the expenditure would not have been incurred if the land had not been in a contaminated F10or derelict state.
F114
Condition C is that it is—
a
in the case of land in a contaminated state, expenditure on relevant contaminated land remediation undertaken by the company (see section 1146), or
b
in the case of land in a derelict state, expenditure on relevant derelict land remediation so undertaken (see section 1146A).
5
Condition D is that the expenditure is—
a
incurred on staffing costs (see section 1170),
b
incurred on materials (see section 1172),
F12c
incurred in respect of relevant land remediation contracted out by the company to another person with whom the company is not connected, or
d
qualifying expenditure on connected sub-contracted land remediation (see section 1175).
6
Condition E is that the expenditure is not subsidised (see section 1177).
F76A
Condition F is that the expenditure is not incurred on landfill tax.
7
See also section 1173 for provision about some cases in which condition B is treated as met.
1145F2Land “in a contaminated state”
1
For the purposes of this Part land is in a contaminated state if (and only if), because of something in, on or under the land, the land is in a condition such that—
a
relevant harm is being caused, or
b
there is a serious possibility that relevant harm will be caused.
C12
But land is not in a contaminated state by reason of the presence in, on or under it of—
a
living organisms or decaying matter deriving from living organisms, air or water, or
b
anything present otherwise than as a result of industrial activity.
3
The Treasury may by order specify circumstances in which subsection (2) is not to apply to the extent specified in the order; and an order under this subsection may contain incidental, supplemental, consequential and transitional provision and savings.
4
In this section “relevant harm” means—
a
death of living organisms or significant injury or damage to living organisms,
b
significant pollution of controlled waters,
c
a significant adverse impact on the ecosystem, or
d
structural or other significant damage to buildings or other structures or interference with buildings or other structures that significantly compromises their use.
1145ALand “in a derelict state”
For the purposes of this Part land is in a derelict state if (and only if) the land—
a
is not in productive use, and
b
cannot be put into productive use without the removal of buildings or other structures.
1145BExclusion of nuclear sites
1
A nuclear site is not land in a contaminated state or land in a derelict state for the purposes of this Part.
2
“Nuclear site” means—
a
any site in respect of which a nuclear site licence is for the time being in force, or
b
any site in respect of which, after the revocation or surrender of a nuclear site licence, the period of responsibility of the licensee has not yet come to an end.
3
In subsection (2) “nuclear site licence”, “licensee” and “period of responsibility” have the same meaning as in the Nuclear Installations Act 1965.
1146“Relevant F3contaminated land remediation”
1
For the purposes of this Part "relevant F14 contaminated land remediation”, in relation to land which is in a contaminated state and in which a major interest has been acquired by a company, means—
a
activities in relation to which conditions A F15to C are met, and
b
if there are such activities, relevant preparatory activity.
2
Condition A is that the activities comprise the doing of any works, the carrying out of any operations or the taking of any steps in relation to—
a
the land in question,
b
any controlled waters affected by that land, or
c
any land adjoining or adjacent to that land.
3
Condition B is that the purpose of the activities is—
a
F17b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F133A
Condition C is that the activities are not—
a
activities of a description specified by order made by the Treasury, or
b
activities required by or by virtue of any enactment specified by such an order.
3B
An order under subsection (3A) may contain incidental, supplemental, consequential and transitional provision and savings.
4
For the purposes of subsection (1)(b) “relevant preparatory activity” means activity—
a
which comprises the doing of anything for the purpose of assessing the condition of—
i
the land in question,
ii
any controlled waters affected by that land, or
iii
any land adjoining or adjacent to that land, and
b
which is connected to such activities within subsection (1)(a) as are undertaken by the company itself or on its behalf.
5
For the purposes of this section controlled waters are “affected by” land in a contaminated state if (and only if) F18because of something in, on or under the land by virtue of which it is contaminated land, the land is in a condition such that—
a
significant pollution of those waters is being caused, or
b
there is a serious possibility that significant pollution of those waters will be caused.
1146AF4“Relevant derelict land remediation”
1
For the purposes of this Part “relevant derelict land remediation”, in relation to land which is in a derelict state and in which a major interest has been acquired by a company, means—
a
activities in relation to which conditions A and B are met, and
b
if there are such activities, relevant preparatory activity.
2
Condition A is that the activities comprise the doing of any works, the carrying out of any operations or the taking of any steps in relation to the land in question.
3
Condition B is that the purpose of the activities is a purpose specified by order made by the Treasury.
4
An order under subsection (3) may contain incidental, supplemental, consequential and transitional provision and savings.
5
For the purposes of subsection (1)(b) “relevant preparatory activity” has the same meaning as for the purposes of subsection (1)(b) of section 1146 (see subsection (4) of that section, but reading the reference to subsection (1)(a) of that section as a reference to subsection (1)(a) of this section).
Words in Pt. 14 heading inserted (with effect in accordance with Sch. 7 paras. 27, 28 of the amending Act) by Finance Act 2009 (c. 10), Sch. 7 para. 2