CIRD60155 | Land Remediation Relief: Exclusions: Polluter Pays: Polluter - "slice of the action" contracts - 1 April 2009 onwards

CTA09/S1150 (3)(b)

‘Slice of the action’ contracts are so called because they confer upon a landowner (who sells the land to say, a developer) the right to share in the proceeds of any subsequent development by the purchaser. In these cases the contract for sale of the land to a builder or developer provides for consideration that is, in whole or in part, contingent upon the successful development and sale of the land.

A common arrangement is for the landowner to receive a fixed sum at the time of the disposal, plus a percentage of the sale proceeds of each building subsequently constructed by the purchaser / developer on the land.

If the polluter (or a party connected to the polluter) enters into a slice of the action contract, then the builder or developer is not entitled to Land Remediation Relief.

Example:

A Ltd was responsible for an area of land being polluted. It sells the land to an unconnected third party, B Ltd, which decontaminates the site. Under the sale agreement, the final sale price payable to A Ltd depends on the sale proceeds received by B Ltd.

Although B Ltd has a major interest in the land (see CIRD69015) it cannot claim Land Remediation Relief as A Ltd was responsible for the pollution and the agreement is a slice of the action contract.