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Contamination in land and buildings – Land Remediation Tax Relief

I often come across contamination items when analysing the costs on construction projects. The capital allowances report would not be complete without a separate section detailing the survey, removal and remediation costs that attracts their own tax relief.
Land Remediation Relief gives a 50% deduction to Developers and 150% to Owner occupiers and Investors.
This legislation was introduced by the government to encourage investment into cleaning up dirty sites and contaminated buildings. I asked Alec Smith at Artisan Environmental to tell us a bit about Asbestos and Contamination Management.

Materials classed as contamination can generally be found in pre 1999 buildings and in the ground. Broadly speaking contamination covers both man-made and natural materials which are harmful to human health or damaging to the environment.

Land Contamination

Land contamination can cover a broad range of materials or pollutants from a wide number of different sources.

Typical contaminants include:

  • Heavy metals
  • Oil
  • Asbestos materials
  • Herbicides and pesticides
  • Ground gases
  • Radon
  • Invasive plants like Japanese Knotweed

Found in the following situations:

  • Heavy industry, printworks, petrol stations, motor trade, construction
  • Farming, such as application of herbicides, pesticides and fertiliser
  • Infrastructure roads, rail & transport, bridges, gas pipe and sewage

Hazards in Buildings

The most common type of contaminant within buildings which is hazardous to health is Asbestos. There are a wide range of building materials which contain this cancer causing mineral. In the UK Asbestos was used until as recently as 1999 and can be found across every type of building including residential property. Approximately 70% of all the pre 2000 commercial stock still contains Asbestos Containing Materials (ACMs).

Some of the common ACM include:

  • Asbestos Insulation (pictured)
  • Asbestos Insulation Board
  • Asbestos Cement products
  • Artex
  • Woven materials
  • Vinyl floor tiles
  • Bitumen Felt

How do we assess if a property contains hazardous materials?

Various inspection methods are used to detect contamination and assess the extent of the hazard. Each one is tailored to the specific situation and the current and future use.

Land Contamination Investigations

Different levels of investigation will determine what’s in the ground

Phase 1 Desk Study. This is a desk-based investigation, involving an initial site walkover survey, followed by a detailed review of externally pulled data including geology, hydrology, hydrogeology, flood risk, history of the site and buildings and the likelihood of potential contamination resulting from this historical use.

Phase 2 Site Investigation. This “builds” on the Desk Study and involves on site drilling and testing of soil samples to check if there is contamination present, and whether this is at levels which will be an issue for the use of the site.

Remediation Strategy. The results of the Site Investigation will determine the most pragmatic and cost-effective solution needed to carry out any remediation and removal of contamination.

Asbestos Surveys;

Different surveys are done in sequence to reduce risk, whilst complying with legislation.

An Asbestos Management Survey prior to purchase will locate most, if not all types of asbestos in a building, thereby significantly reducing risk of unknown costs after purchase.

Asbestos Refurbishment & Demolition Survey is done after purchase to ensure compliance prior to any refurbishment, conversion or demolition works.

A Re-Inspection Survey will monitor the building annually, ensuring that the Asbestos Management Plan remains up to date in the event that Asbestos materials are retained where it is safe to do so.

There are many reasons why it’s important to correctly check for contamination in buildings and on site.

Why do we care?

Health. Many of the materials are dangerous to human health and it’s important to protect the health and safety of all people involved with the development and future use of the site and buildings.

Legal Obligation. The correct management of contaminants and hazards falls under various legislation, such as The Health and Safety at Work Act 1974, The Control of Asbestos Regulations 2012, and the CDM Regulations 2015.

Financial. Remediation of contamination and hazardous materials can be expensive. Avoiding the appropriate surveys before purchase could result in a nasty surprise further down the line, along with a hefty bill that wasn’t expected.

Land Remediation Relief (LRR)

Expenditure on remediating these dirty sites and buildings attracts land remediation relief, subject to certain criteria being met.

Developers can claim an in-year corporation tax deduction of 50% and investors 150%. This relief can be back dated by up to three financial periods (current plus two previous years).

Example; An investment company is converting some barns into workshops and offices. They spend £80,000 removing asbestos cement sheets from the walls and roof. Claiming LRR will enable them to save £22,800 off their corporation tax bill.

Artisan Environmental can assist you with a full range of investigation, surveys and consultancy to protect both you and your asset, starting from acquisition, through planning, development, ongoing occupation and management of the site.

For more information, please contact

Alec Smith BSc AFAAM
Managing Director


Tel: 01329 800650