If I claim on my tax return the cost of putting a new bathroom into my flat which yields a rental income - how does that impact my capital gains position when I sell it?

Arthur Weller replies:
If the new bathroom is a distinct improvement on the old one, then you can use this expenditure to reduce your capital gain when you eventually sell the property. But then you can’t use this figure as a claim on your tax return to reduce your rental profit. But if the new bathroom is just a ‘like for like’ replacement (i.e. not an improvement) on the old bathroom, then conversely you can claim this expenditure against your rental income, but it has no impact on your capital gains when you sell.