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The Chancellor today confirmed an extension to Contaminated Land Relief to include remediating long term derelict land, land contaminated by Japanese Knotweed and extending the list of qualifying expenditure where works are carried out by sub-contractors. These measures are in line with those initially proposed in December 2007 in the Government's response to the consultation "Tax incentives for development of brown-field land" and will apply to expenditure incurred on or after 1 April 2009. Draft guidance will also be published setting out the alignment of the tests for Land Remediation Relief with remediation undertaken specifically in relation to planning permissions.

The key aspects of the changes and extensions to the relief are as follows.

• Contaminated Land Relief (CLR) will be expanded to be available on clearing long term derelict sites. It should be noted that there is a limited amount of expenditure that will qualify and furthermore the site needs to have been empty from 1 April 1998.
• HMRC are to legislate that clearance of Japanese Knotweed will be allowable, however it will be subject to restrictions.
• The definition as to what relief constitutes CLR has been tightened, with the definition of harm being restricted to increase the threshold at which a claim can be made (for example harm to the 'health of living organisms' has changed to 'death of living organisms or significant injury).
• Furthermore the new legislation will only allow relief of harm caused as a result of an industrial activity and natural issues have been specifically excluded (however Treasury Orders will be introduced to expand the relief, for example to Radon).
• The interest in the land has been increased from almost any interest or right to be either a freehold or leasehold (or option to acquire).
• The relief will not be available on expenditure incurred on landfill tax or expenditure required to be incurred by law (for example because the site is dangerous or causing nuisance).