CFM95830 - Interest restriction: tax-EBITDA: Land Remediation Relief

TIOPA10/S407(3)(d)

Deductions for relief for expenditure on contaminated or derelict land, under CTA09/S1147 or S1149, are excluded from the calculation of adjusted corporation tax earnings when determining a company’s tax-EBITDA.

Land Remediation Relief provides a deduction of 100%, for qualifying capital expenditure incurred by companies. An additional deduction of 50% of capital or revenue qualifying expenditure may also be claimed. Further guidance on Land Remediation Relief can be found at CIRD60050 onwards.

Effect for tax-EBITDA purposes

Land Remediation Relief is one of the qualifying tax reliefs specified as an as an excluded amount in TIOPA10/S407(3).

Any land remediation relief received over and above the actual amount of expenditure incurred would have a distorting effect of reducing the group’s interest capacity if included in the calculation of tax-EBITDA.

Consequently, where a company claims a deduction for capital expenditure under S1147 or the additional deduction of 50% of qualifying expenditure under S1149, these should not be brought into account when calculating taxable total profits of the period to determine a company’s tax-EBITDA.