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HMRC internal manual

Corporate Intangibles Research and Development Manual

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Land Remediation Relief: Capital expenditure: Capital Allowances

FA01/SCH22/PARA1 (4b)

CTA09/S1147 (8)

A company cannot make an election to treat capital expenditure as qualifying expenditure for Land Remediation Relief if it could claim under any of the enactments relating to capital allowances.

This includes expenditure qualifying under Capital Allowances Act 2001 for:

  • Plant & Machinery Allowances
  • Industrial Buildings Allowances
  • Agricultural Buildings Allowances
  • Business Premises Renovation Allowances
  • Flat Conversion Allowances
  • Mineral Extraction Allowances
  • Research & Development Allowances
  • Dredging Allowances

Example:

A Ltd incurred capital expenditure on modernising a building in a disadvantaged area. As part of the work, A Ltd engaged a specialist contractor to remove damaged pipe lagging containing asbestos.

A Ltd cannot claim Land Remediation Relief as the building lies in a disadvantaged area and the expenditure qualifies for Business Premises Renovation Allowances. See the Capital Allowances Manual, CA45000, for further information on Business Premises Renovation Allowances.

Industrial Buildings Allowances & Agricultural Buildings Allowances

Industrial Buildings Allowances and Agricultural Buildings Allowances are being phased out by FA2008. However if a company incurs expenditure that qualifies for these allowances in the phase out period then it cannot make an election to treat capital expenditure as qualifying expenditure for Land Remediation Relief.

Further guidance on what qualifies for capital allowances can be found in the Capital Allowances Manual.