Can Asbestos Removal Be Capitalised In Devon?

Asbestos is a harmful substance that can cause serious health concerns when inhaled over a long period of time. In the past, it was widely used in construction materials due to its heat-resistant properties. However, after asbestosis and mesothelioma cases became more prevalent, its use was prohibited in many countries. But many sites in the UK still contain asbestos to this day.

Devon, a county located in South West England, is one of the many areas where asbestos is still present in various sites. As a result, asbestos removal companies like Affordable Asbestos Removal Devon continue to provide services to ensure that the public and the environment are protected from this harmful substance.

Affordable Asbestos Removal Devon is an experienced asbestos removal company in Devon that provides affordable, reliable and timely asbestos removal services. Our expertise has allowed us to work with many businesses and individuals, both in domestic and commercial settings.

In this article, we will discuss whether asbestos removal can be capitalised in Devon, a common question that many property owners and developers alike ask.

Asbestos Removal Within a Site

Asbestos removal is considered part of the sites expenditure incurred in the course of a trade. This means that the cost of the asbestos removal can be capitalised and included in the sites expenditure. In many cases, asbestos removal is an essential part of a sites development process, especially when demolishing or renovating an existing structure.

In situations where the asbestos removal is part of the sites expenditure, the amount spent can be capitalised, which can result in tax relief that can be beneficial for businesses and property developers alike.

Tax Credits

Businesses or individuals who have spent money on asbestos removal may be eligible for a tax credit. This is known as a Land Remediation Relief (LRR), which provides relief on the contaminated land that has been improved or remediated.

The LRR applies to both commercial and residential properties, which means that anyone who has incurred expenditure on asbestos removal can claim their tax credit. The amount of the tax credit that can be claimed will depend on several factors including the size of the site, the expenditure incurred, and the accounting period.

Accounting Period

Accounting periods for LRR tax relief will generally follow the same rules as other tax deductions. The primary indicator of the accounting period will be the point when the land was remediated or improved.

For asbestos removal, this period may be the date when the land was cleared of asbestos material, or when a new development project commenced on the site. The accounting period will usually be 16 years unless the parties agree otherwise.

Quick Guide to Asbestos Removal Tax Relief

For those who have recently undergone asbestos removal, here is a quick guide to claiming your tax relief:

1. First, calculate the total amount that you have spent on asbestos removal. Note that only the expenditure incurred on asbestos removal can be included.

2. Include the expenditure in your sites capitalised expenditure amounts.

3. Calculate the tax liability and deduct the amount of relief that you are eligible for.

4. Claim the relief in the accounting period that is most beneficial to you.

Saving Assuming Land Held for Investment

If the land was held for investment purposes, the relief can be claimed in one of two ways. The first way is by setting the available relief against taxable rental profits arising from the contaminated land. This means that you could receive a reduction in tax by claiming LRR against your rental or letting income from the land.

The second way is by claiming the available LRR relief as a tax credit against the individuals overall tax liability for that accounting period. This method will usually be more beneficial for those who have a large amount of taxable income.

Commercial Property

In cases where the land was held for commercial purposes, any increase in the value of the land following the asbestos removal can be capitalised. This means that the value of the land has been enhanced, which can be an important consideration for businesses looking to sell, lease or develop the property.

The capitalised expenditure on asbestos removal can be included within the overall expenditure for the site, which can be offset against any capital gains tax liability. This makes the process of asbestos removal more financially attractive for businesses who are looking to invest in their properties.

Conclusion

Asbestos removal is an essential part of the development process, and it is considered as part of the sites expenditure. Therefore, it can be capitalised, which can result in tax credits that can be beneficial for businesses and property developers.

In Devon, asbestos removal is a crucial service that Affordable Asbestos Removal Devon provides affordably and reliably. For anyone who has undergone asbestos removal, we hope that this article has provided a useful guide to claiming LRR tax relief and capitalising on asbestos removal expenditure.

For more information about our asbestos removal services in Devon, please contact us on 01962 458066 or email us at [email protected]. You can also visit our website at affordable-asbestos-removal-devon.co.uk for a quick source of news and helpful guides walks.