Previous advisors have treated grants to renovate a leasehold premises as exempt for Corporation Tax purposes. The client is a company limited by guarantee set up to create a resource for local artists, exhibition space and workshop areas for hire.
Subsequent expenditure funded by the grants has been written off and has created substantial tax losses.
I have it in the back of my mind that if grants received are outside the scope of tax then the expenditure funded by the grants should likewise be excluded from claims?
Am I right? Cannot find source in legislation to back up my opinion.