My estate agent client has spent circa £20K on doing up his leased office. The works include external signage, office fitout, and internal decor.
The works were done immediately after signing the lease and before occupying the premises. The premises could have been still used in theory as an office without extensive works but it was just bare walls!
From what I have read no capital allowances are given on this expenditure as these are building works and the premises do not belong to my client anyway.
So is there any way in which relief can be obtained for these works or is it just a totally disallowable cost?
Any advice/guidance welcome, thanks
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You need to breakdown the expenditure in full, and review for capital allowances. External signage, for example, is likely to qualify. Some of the fit out costs might qualify - moveable partitions, furnitute, air conditioning (remember integral features pool), carpets.....
Non-qualifying leasehold improvements don't get any tax relief as such, although if the leasehold interest is sold later on then the chargeable gain will be reduced by a proportion of such costs.
Oh also, buy a copy of Tolley's Capital Allowances - has a great appendix for this sort of work :)