Tax (and accounts) treatment of tenants property improvements

Client company is taking a five or seven year lease on incomplete shell of one floor of a building.  Was originally planned as ground floor offices (or retail) but owner is getting planning change to allow residential (but can't afford to continue the development).

If my client takes the lease and spends £150k on the conversion and fit out to make into a number of apartments and then rents them out to students over the five years of the lease it should make a profit to cover all costs including the conversion costs. 

But how do we treat tenants improvements in the accounts?  

and

Client is convinced he gets 100% tax relief on the cost of refurbishment?  My thoughts are tax relief at end of lease - but I'm not sure why.

Any help would be much appreciated.

Comments
There is 1 comment. Login or register to view it.

Presumably his lease premium

Carlos_Fandango |