Land Remediation Relief: Japanese Knotweed
A brief was released in the 2009 Budget – please see the link below
http://www.hmrc.gov.uk/briefs/company-tax/brief2309.htm
The comments in the brief means HMRC do not intend to extend beyond the relief outlined in the draft legislation, i.e. Japanese knotweed (plus radon and arsenic) will be the only living organisms/naturally occurring substances to be covered.
The draft legislation is being brought in by Statutory Instrument ("SI"), which means it is not tied in to the approval of the 2009 Finance Act (usually late July). The draft SI indicates it will come in to force some time in August this year but to be effective from 1 April 2009.
However, as the draft legislation is open for comment until 30 June it is possible that amendments will be made up to this point. However, in principle the government has committed to giving relief for expenditure incurred in the removal of Japanese knotweed from 1 April 2009 and as the proposal has already been through one consultation process it is unlikely that any significant changes will be made.
The fact that shortly HMRC intends to issue draft guidance on the proposed legislation suggest changes are not anticipated. However, it should be noted that the Revenue can often provide detail in such guidance that is not contained within the letter of the law.
The contents of such guidance does not have legal effect but it can be difficult to get an Inspector to differentiate between the two.
Any advice given by JKSL should be subject to the proviso that the law is, in principle, subject to amendment but in practice this is unlikely and that more will be known about how HMRC intend the relief to work once the draft guidance is issued.
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