Part 14

Remediation of contaminated or derelict land
Chapter 2

Reliefs for expenditure on contaminated or derelict land

Deduction for capital expenditure
1147
1
A company is entitled to relief for an accounting period if conditions A, B and C are met.
2
Condition A is that a major interest in land in the United Kingdom is, or has been, acquired by the company for the purposes of a UK property business or a trade carried on by it.
3
Condition B is that—
a
in the case of land in a contaminated state, the land was in a contaminated state at the time of the acquisition, and
b
in the case of land in a derelict state, the land was in a derelict state throughout the period beginning with the earlier of—
i
1 April 1998, and
ii
the date on which a major interest in the land was first acquired by the company or a person who was connected with the company.
3A
The Treasury may by order—
a
specify circumstances in which the condition in paragraph (a) of subsection (3) need not be met, or
b
replace the date for the time being specified in paragraph (b)(i) of that subsection with a later date.
3B
An order under subsection (3A) may contain incidental, supplemental, consequential and transitional provision and savings.
4
Condition C is that the company incurs capital expenditure which is qualifying land remediation expenditure in respect of the land.
5
For the company to obtain the relief it must make an election.
6
The relief is that for corporation tax purposes the capital expenditure is allowed as a deduction in calculating the profits of the UK property business or the trade for the period in which the expenditure is incurred.
7
For the purposes of this section capital expenditure incurred for the purposes of a UK property business or a trade by a company about to carry on the business or trade is to be treated as incurred by the company—
a
on the first day on which it does carry it on, and
b
in the course of doing so.
8
Relief is not available under this section in relation to so much of the qualifying land remediation expenditure as represents capital expenditure in respect of which an allowance, other than an allowance under Part 2A of CAA 2001 (structures and buildings allowances), has been, or may be, made under the enactments relating to capital allowances.
S. 1147(7) excluded (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 35, 47(2) (with Sch. 5 para. 36)
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
Words in s. 1147(2) inserted (with effect in accordance with Sch. 7 paras. 27, 28 of the amending Act) by Finance Act 2009 (c. 10), Sch. 7 para. 9(2)
S. 1147(3)-(3B) substituted for s. 1147(3) (with effect in accordance with Sch. 7 paras. 27, 28 of the amending Act) by Finance Act 2009 (c. 10), Sch. 7 para. 9(3)
Words in s. 1147(8) inserted (5.7.2019) by The Capital Allowances (Structures and Buildings Allowances) Regulations 2019 (S.I. 2019/1087), regs. 1, 7(2)
Words in Pt. 14 Ch. 2 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. 8