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Aug 4, 2010

Asbestos Contaminated Land Tax Relief

 
 
 

Introduced in the Finance Act 2001, an element of Tax relief may be claimed as a one-off capital expenditure for the removal of the “ presence of any substance in, on or under the land that is causing, or may cause, harm to the health of living things, damage to property, offence to human senses or pollution to a watercourse. That substance may be any solid, liquid, gas or vapour”.

Today’s acknowledged asbestos awareness means the eligibility for the safe removal of any asbestos material found would be considered under the legislation, i.e. Regulation 4 of the Control of Asbestos at Work Regulations 2002, which came into effect on 21 May 2004.

However, a strict eligibility limitation placed on who can obtain relief, means it can only be claimed by companies, and all other categories of taxpayer, i.e. sole traders, partnerships and trustees, are excluded.

In addition, the company must have acquired the contaminated property for the purposes of its trade, or operating a rental business and thus, would also exclude a property trader or developer.

Any contamination needs to be properly dealt with by expert approved contractors, and in order to obtain Tax relief for the expenditure, a claim in writing is required within a company’s corporation tax return, to be made within 2 years of the end of the accounting period in which qualifying expenditure was incurred.

If an initial assessment reveals asbestos materials that are damaged, or likely to be damaged during normal occupation of the premises, the building may be considered to be contaminated because the asbestos poses a health risk to the worker.

It has been estimated that there may as many as half a million buildings in the UK containing asbestos, even though use of asbestos was banned by the 1980s. The dangers of asbestos exposure leading to fatal asbestos-related diseases  such as asbestosis and mesothelioma are still very much in evidence by the continued frequency of mesotholioma compensation being claimed through the law courts.

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