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Allowable Expenditure?

I have a client, a limited company who has incurred expenditure of £70K on extending and updating the business premises which are owed by the directors. There is no lease agreement in place between the company and the directors. Is the expenditure allowable or is it to be posted to the director's loan account?


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13th May 2010 10:43

Difficult one without lots more information!

I think this is going to depend on what they have done and who is benefitting - the owner or the 'tenant'. It may well be necessary to break down the work with some being treated as paid on behalf of the building owners and some being tenant's improvements, F&F and applicable to the company. The absence of a formal lease doesn't mean it isn't leased but I would suggest that the client should consider putting a formal agreement in place.


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