Eligibility for land remediation relief

Northern Gas Networks appealed against HMRC’s decision to refuse its claim for land remediation relief (FA 2001, Sch 22). In essence, the taxpayer claimed relief in respect of expenditure incurred in replacing and improving the iron mains pipes under private streets.

The First-tier Tribunal carried out a detailed analysis of land remediation relief. It concluded that for the relief to be due, the expenditure had to relate to land. But, here, it was the gas already in the iron mains pipes when the taxpayer acquired the rights to the land that caused the contamination. The land was in a contaminated state as result of the taxpayer’s action; relief was therefore precluded by para 12(4).

The taxpayer’s appeal was dismissed.

Issue: 4740 / Categories: Tax cases