LRR was introduced by HMRC in 2001 to encourage new use of previously blighted land. Japanese knotweed infestation did not previously qualify under the legislation’s definition of ‘blighted land’, but since 1 April 2009, HMRC have accepted that Japanese knotweed is sufficiently invasive and destructive that it satisfies their “harm” test.
How Does LRR Benefit Me?
As with all legislation, the detail is complex. In layman’s terms, LRR is a relief from Corporation Tax. It provides a deduction of 100% plus an additional deduction of 50% for qualifying expenditure incurred by companies in cleaning up contaminated land. For example, for every £100 your company spends on Japanese knotweed treatment, it will only cost you £69.
Does my land qualify?
There is a rule which states that in order to qualify, land must have been acquired in a contaminated state. However, when it comes to Japanese knotweed, it has been recognised that an infestation can occur post-purchase through no fault of the landowner, i.e. from fly-tipping for example. Therefore, Japanese knotweed has been excluded from this rule, although clearly land that is purposely contaminated with Japanese knotweed would not qualify.