Considering this question in isolation and without being aware of all the facts, assuming he is both director and shareholder.
If a company pays personal costs these should have been debited to the directors account. HMRC state
‘If the company makes payments to, or on behalf of, the directors for their personal bills, and these payments do not form part of their remuneration package, these should normally be debited to the appropriate director’s loan account’ ( rather than being treated as a pecuniary liability which has IT and NIC consequences.)
If the account was in credit so it reduces the balance owed to the director- there are no non IHT tax considerations.
If of course there is a credit directors current account owed to the individual on his death then this asset is subject to IHT as BPR is not eligible on this 'investment in the company .
However, if the account is overdrawn( =loan) then there are potentially a number of tax considerations.
For the company - Where the loan account is outstanding at the end of an AP and not cleared by CT due date s 455 tax should have been paid. If the individual who owes the money dies then a decision then needs to be made as to whether the estate is to repay the monies to the company and then a s455 refund will ensue. If alternatively a loan is written off, then the provisions of s419 ITTOIA 2005 need to be considered :
Loans and advances to persons who die
(1)This section applies if—
(a)a loan or advance is made to a person who dies,
(b)a company is or was chargeable to tax under section 455 of CTA 2010 (charge to tax in case of loan to participator)] in respect of the loan or advance, and
(c)after the death the company releases or writes off the whole or part of the debt in respect of the loan or advance.
*(2)Tax is not charged under this Chapter if at the time of the release or writing off **the debt is due from the person’s personal representatives in that capacity, but see—
(a)section 664 (under which the amount that would be so charged is treated as part of the aggregate income of the estate for the purposes of Chapter 6 of Part 5), and
(b)section 947 of CTA 2009 (under which similar provision is made for the purposes of Chapter 3 of Part 10 of that Act)].
(3)If subsection (2) does not apply, tax is charged under this Chapter on the person from whom the debt is due at the time of release or writing off.
The loan is written off/ legal release is not however charged to IT or NIC charge on the individual re employment income (ITEPA 2003) ( whilst alive there is a BIK).