Second consultation on Land Remediation Relief reforms

A Previous consultation carried out in 2025 showed that Land Remediation Relief (LRR) is not proving fully effective in incentivising the remediation of derelict and brownfield land.

• The government has therefore identified key areas for reforming LRR that could make it more effective.
• The consultation invites views from developers, other businesses, organisations that represent businesses, tax and accountancy experts, think tanks and academics, Local Planning Authorities and other interested parties.

Aligning with planning processes

It is proposed to simplify the process of claiming LRR by aligning it with the common definitions, guidance and legislation used by Local Authorities (LAs) during the planning process.

• Claimants would not need to become familiar with definitions in tax legislation in addition to those in planning and environmental legislation.
• The government believes this will also allow developers to claim LRR on an expanded list of eligible contaminants.
• The intention is to have a single process for claiming LRR that takes account of the differing planning laws and processes across England, Scotland, Wales and Northern Ireland.
• Since not all remediation activity requires planning permission or goes through the planning process with LAs, the government is proposing to hold an alternative claim process using a streamlined list of contaminants that would be eligible for LRR.

Certain elements will remain excluded, including compulsory remediation and remediation relating to water and air that fall within environmental definitions, but are not part of the proposed reforms.

Derelict land

To increase the viability of brownfield developments, the government is considering removing the existing requirement for land to have been derelict since 1998 and introducing a revised definition of derelict land.

• The proposed definition of derelict land is set out as follows:
  • Land is in a derelict state if, and only if:
    1. The land is not in productive use.
    2. The land cannot be put into productive use without the removal of buildings or other structures on it.
    3. And those buildings or structures are remnants of previous development or occupation and, by reason of abandonment, redundancy, substantial damage, structural unsoundness or advanced disrepair, prevent the land from being brought back into productive use.
  • For the purposes of this section, land is not to be regarded as in a derelict state if:
    1. It is merely vacant, underused or awaiting redevelopment.
    2. It is held for future development or disposal by the same economic entity for over five years.
    3. It is capable of productive use without demolition, clearance of fixed structures or foundations, or levelling; or,
    4. it is in any economic, social, amenity, ancillary or interim use, including use for parking, storage, access, advertising, open space, or recreation.
• The intention is that the definition will exclude land that has been intentionally made derelict and land that could be used productively but is being remediated for commercial reasons.
• An alternative to revising the definition could be to update the 1998 qualifying date to a more recent year.

The government does not intend to reform the list of qualifying works or other restrictions for LRR, but proposals include adjustments to the rate of relief.

• For pre-1998 derelict land, the 150% deduction rate will remain.
• Sites made derelict after 1998 will also qualify for the 150% rate.
• For sites made derelict after 2027, the rate will be reduced to 100%.
  • This is because of other available support for new sites and the risk of inflating land prices.

Timing of the relief

The government proposes that companies be allowed to elect to treat any LRR qualifying revenue expenditure as a deduction in the year the expenditure is incurred.

• For developers who do not usually receive relief until housing units are sold, this would bring the relief forward.
• A business that makes the election would deduct the expenditure from its work-in-progress balance in the period the expense is incurred. The elected cost would be multiplied by the 150% rate in calculating the relief due.
• The timing difference would need to be reflected by recognising a deferred tax liability in the accounts.
• When the development or housing units are sold, the costs of sale for tax purposes will be costs net of any amounts expensed in earlier periods through the election process.
  • Editor's note: Businesses would therefore need to consider the possibility and impact of future Corporation Tax rate changes when deciding whether to make the election.

Package of reforms

The government is seeking views on how the reforms outlined above could work if implemented together.

• For instance, requiring a development to receive a notice of discharge of planning conditions needs to be considered in light of providing an option to bring forward the point at which LRR is claimed.
• Views on the transitional arrangements needed are also invited.

The consultation closes on 21 September 2026. Responses should be emailed to This email address is being protected from spambots. You need JavaScript enabled to view it..

Useful guides on this topic

Land Remediation Relief (LRR)
What is Land Remediation Relief (LRR)? Who can claim LRR and what are the conditions? What happens if LRR creates or enhances a loss?

Land Remediation Relief consultation response
The government has published a response to its consultation 'Land Remediation Relief'. The review sought to understand whether the Corporation Tax relief continues to incentivise the redevelopment of brownfield land and whether reforms are needed to ensure it remains effective, accessible and aligned with modern remediation practices.

Land Remediation Relief consultation
HM Treasury has published 'Consultation on Land Remediation Relief', which seeks to review the effectiveness of Land Remediation Relief (LRR), determine whether it is still meeting its objective of boosting the development of brownfield land, and obtain a greater understanding of how robust LRR is against abuse.

External link

Reforming Land Remediation Relief Consultation 

Question 1: Would replacing the current contamination definitions with a process aligned with relevant planning and land contamination legislation and definitions make it easier for businesses and developers to assess eligibility and comply with the relief in practice?

Question 2: Do you foresee any issues with this reform option in respect to its interaction with the differing planning processes and legislation across England, Scotland, Wales and Northern Ireland?

Question 3: Do you consider that this approach could lead to different outcomes across different local authorities, for example, where contamination assessments and remediation requirements are applied inconsistently? If so, how might this risk be mitigated?

Question 4: Are there categories of remediation that would not fall within the planning framework or Local Authority conditions and therefore would not qualify under the proposed reform, but which can currently be claimed under LRR? If so, please provide examples.

Question 5: Are there any other unintended consequences of aligning the relief to the planning process that the government should consider?

Question 6: Do you have examples of cases where the misalignment between LRR definitions and planning requirements could directly affect a development decision if the relief were to be aligned with the planning process?

Question 7: How do you envisage this reform working in practice for your business or clients? Are there aspects of the proposed mechanism, such as the role of the Local Authority in determining qualifying remediation, that would require further clarification or guidance to be workable?

Question 8: If this reform is pursued alongside the option in Chapter 4 to accelerate the timing of the relief, a claim for LRR would be made once the LA has discharged the relevant planning condition. Is there likely to be a delay between remediation expenditure being incurred and the LA formally discharging the condition? Is so, how significant would the impact be?

Question 9: Do you consider that this approach appropriately balances the policy intention of reducing complexity with certainty of outcome for businesses and developers? If not, what alternative approach would you suggest?

Question 10: Do you consider that the discharge of a planning condition by the Local Authority would provide a workable and consistent trigger point for claims across contaminated sites? If not, what alternative mechanism would you propose?

Question 11: Does this reform option appropriately consider the circumstances in which remediation activity that is currently eligible for LRR does not interact with planning processes or Local Authorities?

Question 12: Are there any other issues or concerns you have with this proposal?

Question 13: To what extent do you consider that removing the 1998 date, in isolation, would be sufficient to incentivise the remediation of derelict land, or would additional reforms to LRR be necessary to achieve this aim?

Question 14: What risks, practical issues, or unintended consequences should the government consider if it were to remove the 1998 date requirement?

Question 15: How often are sites moved into dereliction and is there a continuous replenishment of the stock of derelict land in the UK? Please provide evidence where available.

Question 16: Are you aware of how much derelict land is currently available in the UK and, in your experience, how much of that land has been derelict since: a. 1998, b. 2008 or c. 2018?

Question 17: Would removing the date requirement for derelict land status from the relief framework simplify the regime, improve 14 targeting, and better align the relief with its policy objectives? Please state your reason.

Question 18: Do you consider the current definition of 'productive state' to be sufficiently clear and consistently applied in practice? If not, how should it be revised?

Question 19: Does the government’s initial definition of derelict land capture legitimate derelict land? Please state your reasoning.

Question 20: Does the government’s initial definition of derelict land provide adequate protection against misuse? Please state your reasoning.

Question 21: What alternative characteristics or measurements of a site could the government use to determine whether a site is derelict?

Question 22: Would you consider this reform risks creating an unintended incentive to move land into dereliction in order to claim Land Remediation Relief?

Question 23: How much previously excluded derelict land do you believe would be brought into scope by this reform? Please include data if available.

Question 24: Would it be preferable to update the 1998 qualifying date rather than removing and replacing it with a revised definition?

Question 25: If the date were to be updated, what date would you propose? What is your rationale for that date, and how would this interact with the broader objectives of the relief?

Question 26: Should accelerated relief be available from the point at which expenditure is incurred and what practical or administrative considerations should be considered in implementing this option?

Question 27: To what extent do you consider that accelerating relief would change developer behaviour - for example, by making previously unviable sites viable, or by accelerating the pace of development on sites already in the pipeline?

Question 28: Are there any unintended consequences or avoidance risks the government should be aware of in accelerating relief, and how might these be mitigated?

Question 29: What mechanisms would businesses have in place to ensure that the same costs are not subsequently relieved again, for example, through a capital allowances claim or as a deductible expense on disposal?

Question 30: Do you consider that the three reforms proposed in this consultation are more effective in combination than individually? Please explain your reasoning.

Question 31: Are there any inconsistencies or interactions in how these potential reforms would work in practice if all were implemented that the government should be aware of?

Question 32: Are there any unintended consequences or effects, for example, with previously qualifying expenditure being removed from eligibility, that you anticipate may materialise if these options are implemented as a package?

Question 33: If the proposals were not taken forward as a package, which individual proposal(s) do you consider would have the greatest impact on remediation?

Question 34: Are there interactions between the three proposed reforms, or consolidated package, and other areas of the tax code that the government should consider in finalising the design of the relief?

Question 35: What transition period or arrangements would be needed to give your organisation sufficient certainty to plan qualifying expenditure effectively?