The Complete Guide to Land Remediation Relief

The relief was introduced in 2001 to help bring land blighted by its industrial past back into use. It was extended in 2009 to cover long-term derelict land and a small number of natural contaminants. It is set out in Part 14 of the Corporation Tax Act 2009.

Because it is a Corporation Tax relief, it applies to qualifying land anywhere in the UK. It covers both revenue and capital spending, and it applies to buildings on the land as well as the ground itself, which is why asbestos removal from older industrial and commercial buildings is one of the most common reasons to claim.

The conditions

• The claimant is a company within the charge to UK Corporation Tax. Individuals and partnerships cannot claim
• The land is in the UK and is held for the purposes of a trade or a UK property business, such as letting
• The land was already contaminated or derelict when the company acquired its interest in it
• The contamination or dereliction was not caused, in whole or in part, by the company or a person connected with it

Why the acquisition test matters

The relief is designed to reward companies that take on land with a problem and fix it, not companies that clean up pollution they caused. That is why the "polluter pays" principle is built into the rules and why the timing of acquisition matters.

Property investors, developers and trading companies can all qualify, provided the land is used for their trade or property business. Developers selling the finished property usually claim an additional 50% on costs that are already deductible.

From April 2009, land counts as contaminated where substances present as a result of industrial activity are causing, or have a serious possibility of causing, relevant harm. Relevant harm includes death, serious injury or illness, significant pollution of controlled waters and serious damage to buildings that affects their use.

Common examples

• Asbestos in roofs, cladding, insulation and other building materials
• Hydrocarbons and fuel residues from former industrial use
• Heavy metals and other industrial residues in soil
• Ground gases from former industrial or made ground

Natural contaminants

Naturally occurring contamination does not usually qualify. There are three exceptions: arsenic, radon and Japanese knotweed. Costs of dealing with these can qualify even though they are not caused by industrial activity, subject to the other conditions.

Remediation that the company is required to carry out under a statutory notice can fall outside the relief, so check the position before relying on it.

Costs that can qualify

• Surveys and testing to establish the level of contamination, such as asbestos refurbishment and demolition surveys
• Removal of contamination, for example asbestos cement roof sheets and asbestos-containing gutters, with licensed disposal
• Containing contamination to prevent harm, such as encapsulation
• Staff costs, subcontractor costs and materials directly used in the remediation
• Associated professional fees and preliminaries, where they relate directly to the remediation

Costs that do not qualify

• Costs that would have been incurred even if the land were not contaminated
• Expenditure that is subsidised, for example through grant funding
• Landfill Tax
• Work that is planned but never carried out
• Costs where the company or a connected person caused the contamination

Replacement works, such as a new roof or overcladding after asbestos removal, need care. Some elements may qualify as part of the remediation and others may not, so the split should be agreed with your tax adviser and supported by clear contractor records.

Derelict land relief was introduced from April 2009. Land is derelict if it is not in productive use and cannot be brought back into productive use unless buildings or structures on it are removed.

The land must have stayed derelict since the earlier of 1 April 1998 and the date the company, or a connected person, acquired it. The relief is separate from contaminated land relief: a site does not need to be both derelict and contaminated to qualify.

The qualifying costs

• Establishing which redundant structures are present
• Removing post-tensioned concrete heavyweight construction
• Removing building foundations and machinery bases
• Removing reinforced concrete pile caps and basements
• Removing redundant below-ground services such as gas, water, electricity and telecommunications

HMRC treats this list as exhaustive. General demolition and site clearance costs outside it do not qualify as derelict land expenditure.

The government consulted on the relief and, in June 2026, published a summary of responses saying there was a compelling case for reform. A second consultation followed in July 2026 and closed on 21 September 2026.

Any changes would be expected to follow a future Budget and Finance Bill, with transitional arrangements.

What the second consultation proposed

• Aligning the definitions of contamination with those used in the planning system
• A simpler route for remediation outside the planning system
• Removing or updating the 1998 cut-off for derelict land, with a new definition
• Keeping the 150% rate for land already derelict, with a lower 100% rate for land made derelict after 2027
• Letting developers deduct qualifying costs when incurred, rather than when properties are sold

Steps to take

• Establish the contamination with a suitable survey, such as an asbestos refurbishment and demolition survey or a ground investigation
• Check the ownership and acquisition conditions with your tax adviser before work starts
• Ask your contractor to separate qualifying remediation costs from other works in quotes, valuations and final accounts
• Keep survey reports, waste consignment notes, air test certificates and photographs
• Make the capital election within two years of the end of the accounting period in which the cost was incurred
• Claim the deduction or payable credit through your Corporation Tax return

What Starfish Construction can and cannot do

Starfish Construction does not give tax advice or make claims on clients' behalf. What we can do is deliver the survey, remediation and records a claim depends on.

• Asbestos surveys, management plans and licensed removal through SEAS, our environmental and asbestos division
• Technical surveys of roofs and building envelopes
• Replacement roofing and overcladding once remediation is complete
• Clear cost breakdowns and handover documentation to support your adviser