Finance Bill

House of Commons

Session 2008 - 09
Internet Publications
Other Bills before Parliament

Finance Bill

Finance Bill
Schedule 7 — Contaminated and derelict land
Part 1 — Amendments of Part 14 of CTA 2009
93

Y is 365.
      (6)
The reference in subsection (2C) of section 393A of ICTA to so much of the
loss referred to in that subsection not falling within subsection (2B) of that
section as does not exceed the amount of the allowance mentioned in
subsection (2C)(b) (“the subsection (2C) loss”) has effect in relation to a
5
relevant accounting period as a reference to so much of the subsection (2C)
loss as exceeds that which can be set off under section 393A of ICTA by
virtue of this paragraph.
Schedule 7
Section 26

Contaminated and derelict land
10
Part 1
Amendments of Part 14 of CTA 2009
1
Part 14 of CTA 2009 (remediation of contaminated land) is amended as
follows.
2
In the heading of the Part, after “contaminated” insert “or derelict”.
15
3     (1)
Section 1143 (overview of Part) is amended as follows.
      (2)
In subsection (1), after “contamination” insert “or dereliction”.
      (3)
In subsection (7), after “contaminated” insert “or derelict”.
4     (1)
Section 1144 (“qualifying land remediation expenditure”) is amended as
follows.
20
      (2)
In subsection (1), for “E” substitute “F”.
      (3)
In subsection (2), insert at the end “or a derelict state (see section 1145A)”.
      (4)
In subsection (3), after “contaminated” insert “or derelict”.
      (5)
For subsection (4) substitute—
“(4)
Condition C is that it is—
25
(a)
in the case of land in a contaminated state, expenditure on
relevant contaminated land remediation undertaken by the
company (see section 1146), or
(b)
in the case of land in a derelict state, expenditure on relevant
derelict land remediation so undertaken (see section 1146A).”
30
      (6)
In subsection (5), for paragraph (c) (and the “or” before it) substitute—
“(c)
incurred in respect of relevant land remediation contracted
out by the company to another person with whom the
company is not connected, or
(d)
qualifying expenditure on connected sub-contracted land
35
remediation (see section 1175).”
      (7)
After subsection (6) insert—
“(6A)
Condition F is that the expenditure is not incurred on landfill tax.”

Finance Bill
Schedule 7 — Contaminated and derelict land
Part 1 — Amendments of Part 14 of CTA 2009
94

5
For section 1145 substitute—
“1145
Land “in a contaminated state”
(1)
For the purposes of this Part land is in a contaminated state if (and
only if), because of something in, on or under the land, the land is in
a condition such that—
5
(a)
relevant harm is being caused, or
(b)
there is a serious possibility that relevant harm will be
caused.
(2)
But land is not in a contaminated state by reason of the presence in,
on or under it of—
10
(a)
living organisms or decaying matter deriving from living
organisms, air or water, or
(b)
anything present otherwise than as a result of industrial
activity.
(3)
The Treasury may by order specify circumstances in which
15
subsection (2) is not to apply to the extent specified in the order; and
an order under this subsection may contain incidental,
supplemental, consequential and transitional provision and savings.
(4)
In this section “relevant harm” means—
(a)
death of living organisms or significant injury or damage to
20
living organisms,
(b)
significant pollution of controlled waters,
(c)
a significant adverse impact on the ecosystem, or
(d)
structural or other significant damage to buildings or other
structures or interference with buildings or other structures
25
that significantly compromises their use.
1145A
Land “in a derelict state”
For the purposes of this Part land is in a derelict state if (and only if)
the land—
(a)
is not in productive use, and
30
(b)
cannot be put into productive use without the removal of
buildings or other structures.
1145B
Exclusion of nuclear sites
(1)
A nuclear site is not land in a contaminated state or land in a derelict
state for the purposes of this Part.
35
(2)
“Nuclear site” means—
(a)
any site in respect of which a nuclear site licence is for the
time being in force, or
(b)
any site in respect of which, after the revocation or surrender
of a nuclear site licence, the period of responsibility of the
40
licensee has not yet come to an end.
(3)
In subsection (2) “nuclear site licence”, “licensee” and “period of
responsibility” have the same meaning as in the Nuclear Installations
Act 1965.”
6     (1)
Section 1146 (“relevant land remediation”) is amended as follows.
45

Finance Bill
Schedule 7 — Contaminated and derelict land
Part 1 — Amendments of Part 14 of CTA 2009
95

      (2)
In subsection (1)—
(a)
for “land remediation”, in relation to land” substitute “contaminated
land remediation”, in relation to land which is in a contaminated
state and in which a major interest has been”, and
(b)
for “and B” substitute “to C”.
5
      (3)
In subsection (3)—
(a)
in paragraph (a), for “harm, or any pollution of controlled waters,”
substitute “relevant harm”, and
(b)
omit paragraph (b) (and the “or” before it).
      (4)
After that subsection insert—
10
“(3A)
Condition C is that the activities are not—
(a)
activities of a description specified by order made by the
Treasury, or
(b)
activities required by or by virtue of any enactment specified
by such an order.
15
(3B)
An order under subsection (3A) may contain incidental,
supplemental, consequential and transitional provision and
savings.”
      (5)
In subsection (5), for the words after “(and only if)” substitute “because of
something in, on or under the land by virtue of which it is contaminated
20
land, the land is in a condition such that—
(a)
significant pollution of those waters is being caused, or
(b)
there is a serious possibility that significant pollution of those
waters will be caused.”
      (6)
In the heading, after “relevant” insert “contaminated”.
25
7
After that section insert—
“1146A
“Relevant derelict land remediation”
(1)
For the purposes of this Part “relevant derelict land remediation”, in
relation to land which is in a derelict state and in which a major
interest has been acquired by a company, means—
30
(a)
activities in relation to which conditions A and B are met, and
(b)
if there are such activities, relevant preparatory activity.
(2)
Condition A is that the activities comprise the doing of any works,
the carrying out of any operations or the taking of any steps in
relation to the land in question.
35
(3)
Condition B is that the purpose of the activities is a purpose specified
by order made by the Treasury.
(4)
An order under subsection (3) may contain incidental, supplemental,
consequential and transitional provision and savings.
(5)
For the purposes of subsection (1)(b) “relevant preparatory activity”
40
has the same meaning as for the purposes of subsection (1)(b) of
section 1146 (see subsection (4) of that section, but reading the
reference to subsection (1)(a) of that section as a reference to
subsection (1)(a) of this section).”

Finance Bill
Schedule 7 — Contaminated and derelict land
Part 1 — Amendments of Part 14 of CTA 2009
96

8
In the heading of Chapter 2, after “contaminated” insert “or derelict”.
9     (1)
Section 1147 (deduction for capital expenditure) is amended as follows.
      (2)
In subsection (2), after “that” insert “a major interest in”.
      (3)
For subsection (3) substitute—
“(3)
Condition B is that—
5
(a)
in the case of land in a contaminated state, the land was in a
contaminated state at the time of the acquisition, and
(b)
in the case of land in a derelict state, the land was in a derelict
state throughout the period beginning with the earlier of—
(i)
1 April 1998, and
10
(ii)
the date on which a major interest in the land was first
acquired by the company or a person who was
connected with the company.
(3A)
The Treasury may by order—
(a)
specify circumstances in which the condition in paragraph (a)
15
of subsection (3) need not be met, or
(b)
replace the date for the time being specified in paragraph
(b)(i) of that subsection with a later date.
(3B)
An order under subsection (3A) may contain incidental,
supplemental, consequential and transitional provision and
20
savings.”
10    (1)
Section 1149 (additional deduction for qualifying land remediation
expenditure) is amended as follows.
      (2)
In subsection (2), after “that” insert “a major interest in”.
      (3)
For subsection (3) substitute—
25
“(3)
Condition B is that—
(a)
in the case of land in a contaminated state, the land was in a
contaminated state at the time of the acquisition, and
(b)
in the case of land in a derelict state, the land was in a derelict
state throughout the period beginning with the earlier of—
30
(i)
1 April 1998, and
(ii)
the date on which a major interest in the land was first
acquired by the company or a person who was
connected with the company.
(3A)
The Treasury may by order—
35
(a)
specify circumstances in which the condition in paragraph (a)
of subsection (3) need not be met, or
(b)
replace the date for the time being specified in paragraph
(b)(i) of that subsection with a later date.
(3B)
An order under subsection (3A) may contain incidental,
40
supplemental, consequential and transitional provision and
savings.”
11    (1)
Section 1150 (no relief if company responsible for contamination) is
amended as follows.

Finance Bill
Schedule 7 — Contaminated and derelict land
Part 1 — Amendments of Part 14 of CTA 2009
97

      (2)
The existing provision becomes subsection (1) of that section.
      (3)
In that subsection, for “state if the land is in that” substitute “or derelict state
if the land is in a contaminated or derelict”.
      (4)
After that subsection insert—
“(2)
A company is not entitled to relief under this Chapter in respect of
5
expenditure on land all or part of which is in a contaminated or
derelict state if—
(a)
the land is in that state wholly or partly as a result of any
thing done, or omitted to be done, by a person not within
subsection (1), and
10
(b)
that person, or a person connected with that person, has a
relevant interest in the land.
(3)
For the purposes of subsection (2) a person has a relevant interest in
land if the person—
(a)
holds any interest in, right over or licence to occupy the land
15
(including an option to acquire any such interest, right or
licence in any circumstances), or
(b)
has disposed of any estate or interest in the land for a
consideration that to any extent reflects the impact, or likely
impact, on the value of the land of the remediation of its
20
contamination or dereliction.”
      (5)
In the heading, insert at the end “or dereliction or polluter has interest”.
12    (1)
Section 1161 (relief in respect of I minus E basis: enhanced expenses payable)
is amended as follows.
      (2)
In subsection (2), after “that” insert “a major interest in”.
25
      (3)
For subsection (3) substitute—
“(3)
Condition B is that—
(a)
in the case of land in a contaminated state, the land was in a
contaminated state at the time of the acquisition by the
company of a major interest in the land, and
30
(b)
in the case of land in a derelict state, the land was in a derelict
state throughout the period beginning with the earlier of—
(i)
1 April 1998, and
(ii)
the date on which a major interest in the land was first
acquired by the company or a person who was
35
connected with the company.
(3A)
The Treasury may by order—
(a)
specify circumstances in which the condition in paragraph (a)
of subsection (3) need not be met, or
(b)
replace the date for the time being specified in paragraph
40
(b)(i) of that subsection with a later date.
(3B)
An order under subsection (3A) may contain incidental,
supplemental, consequential and transitional provision and
savings.”
      (4)
In subsection (4)—
45

Finance Bill
Schedule 7 — Contaminated and derelict land
Part 1 — Amendments of Part 14 of CTA 2009
98

(a)
for “Chapter 4” substitute “land remediation”, and
(b)
omit “(see section 1162)”.
      (5)
Omit subsection (5).
      (6)
In subsection (6), omit “150% of”.
      (7)
In the heading, omit “enhanced”.
5
      (8)
In the heading before the section omit “for qualifying Chapter 4 expenditure”.
13
For section 1162 substitute—
“1162
Additional relief
(1)
If a company is entitled to relief under section 1161 for an accounting
period it is also entitled to relief under this section for the period.
10
(2)
For the company to obtain the relief it must make a claim.
(3)
The relief is that the company may treat 50% of the qualifying
Chapter 4 expenditure as expenses payable which fall to be brought
into account at Step 3 in section 76(7) of ICTA (deduction for
expenses payable).
15
(4)
For the purposes of this Chapter “the qualifying Chapter 4
expenditure” means—
(a)
the company’s qualifying land remediation expenditure for
the accounting period, less
(b)
the amount (if any) which as a result of paragraph (a) of Step
20
1 in section 76(7) of ICTA is not to be brought into account at
that step as expenses payable for the period.”
14    (1)
Section 1163 (no relief if company responsible for contamination) is
amended as follows.
      (2)
The existing provision becomes subsection (1) of that section.
25
      (3)
In that subsection—
(a)
after “1161” insert “or 1162”, and
(b)
for “state if the land is in that” substitute “or derelict state if the land
is in a contaminated or derelict”.
      (4)
After that subsection insert—
30
“(2)
A company is not entitled to relief under this Chapter in respect of
expenditure on land all or part of which is in a contaminated or
derelict state if—
(a)
the land is in that state wholly or partly as a result of any
thing done, or omitted to be done, by a person not within
35
subsection (1), and
(b)
that person, or a person connected with that person, has a
relevant interest in the land.
(3)
For the purposes of subsection (2) a person has a relevant interest in
land if—
40
(a)
the person holds any interest in, right over or licence to
occupy the land (including an option to acquire any such
interest, right or licence in any circumstances), or

Finance Bill
Schedule 7 — Contaminated and derelict land
Part 1 — Amendments of Part 14 of CTA 2009
99

(b)
has disposed of any estate or interest in the land for a
consideration that to any extent reflects the impact, or likely
impact, on the value of the land of the remediation of its
contamination or dereliction.”
      (5)
In the heading, insert at the end “or dereliction or polluter has interest”.
5
15
In section 1165(1)(a) (meaning of “qualifying life assurance business loss”),
after “1161” insert “or 1162”.
16
In section 1169(2)(c) and (3)(c) (artificially inflated claims for relief), after
“1161” insert “or 1162”.
17    (1)
Section 1173 (expenditure incurred because of contamination) is amended as
10
follows.
      (2)
In subsections (1) and (2), after “contaminated” insert “or derelict”.
      (3)
For subsection (3) substitute—
“(3)
Subsection (4) applies—
(a)
in the case of land in a contaminated state, if the main
15
purpose of any activities is any of those specified in section
1146(3), or
(b)
in the case of land in a derelict state, if the main purpose of
any activities is any of those specified in section 1146A(3).”
      (4)
In the heading, insert at the end “or dereliction”.
20
18
Omit section 1174 (sub-contractor payments: introductory).
19    (1)
Section 1175 (“qualifying expenditure on sub-contracted land remediation”:
connected persons) is amended as follows.
      (2)
After subsection (1) insert—
“(1A)
In this section, a “sub-contractor payment” means a payment made
25
by the company to the sub-contractor in respect of relevant land
remediation contracted out by the company to the sub-contractor.”
      (3)
In subsection (2), for “sub-contracted land remediation” substitute
“connected sub-contracted land remediation” for the purposes of section
1144(5)”.
30
      (4)
In subsection (3)—
(a)
in paragraph (a), after “carrying on” insert “or arranging for carrying
on”, and
(b)
in paragraph (c) for “incurred on” substitute “in respect of”.
      (5)
For the heading substitute “Connected sub-contractors”.
35
20
Omit section 1176 (“qualifying expenditure on sub-contracted land
remediation”: other cases).
21
In section 1178 (persons having a “relevant connection” to a company)—
(a)
after “contaminated” insert “or derelict”, and
(b)
in paragraph (b), after “when” insert “a major interest in”.
40