Many are aware of the Government's plans to abolish Land Remediation Relief (LRR) in next year's Finance Act and it is thought that the relief will be lost from 2013.
The availability of LRR, which gives a Corporation Tax Relief of up to 150% on clean up costs (including the cost of cleaning up and removing Japanese Knotweed), is valuable to developers looking at so called brownfield sites. The loss of LRR therefore will adversely affect the GDV calculations on acquisitions of contaminated sites and may hinder purchases or at least cause a sudden drop in the price attainable for them.
Whilst the Government's argument that the relief isn't effective is a highly contentious one, Owners of contaminated sites and developer's need to start acting on the basis that the relief will be lost within the next 2 years.
In particular, developers may need to consider actioning the clean up of any contaminated sites in their land banks as soon as possible or at least start revisiting the potential development values they have attributed to these sites.
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