CGT allowable legal expenses

Thousands of investors who joined class legal action to gain compensation when the LF equity/Woodford fund was suspended have now had some taxable compensation payments made (as CGT partial distributions). A significant percentage of this compensation was taken to pay the legal expenses. Can these expenses be offset to reduce the tax payable (ie increase any claimable loss)?

Hi,
Having looked at the FAQ's document from the Fund that was issued to investors following the judgement it states that they ''expect' that payments made by WEIF to investors under the Scheme will be treated as capital distributions from the Fund.
And as such, each distribution will be deemed to be a part-disposal of the shares in the Fund for UK capital gains tax purposes and may, depending on your personal circumstances, give rise to a capital gains tax liability on any gain or give rise to a tax loss'.
I assume that you have this document. we only have fairly limited information but assuming that the legal costs were incurred in relation to the distribution received in respect of the shares following the judgement, all we can really do is refer you to the relevant guidance and the relevant chapter here is in the CG manual at CG15150 - Expenditure: introduction, which relates to expenditure. In particular, the guidance at CG15180 - Expenditure: enhancement expenditure relating to enhancement expenditure, CG15250 - Expenditure: incidental costs of acquisition and disposal incidental costs of acquisition or disposal and CG15280 - Expenditure: professional fees which relates to professional fees.
Professional fees are only allowable to the extent that they are directly referable to the cost of acquiring or disposing of the asset and any incidental costs of disposal must be wholly and exclusively for the purposes of the disposal.
The legislation for enhancement expenditure as per CG15180 is at TCGA92 S38(1)(b). This states the only expenditure that could be allowed is expenditure incurred ON the asset for the purposes of enhancing the value of it, which is still reflected in the asset at the time of disposal, and expenditure incurred in establishing, preserving or defending title to or a right over the asset.
Based on the information we have, it would appear unlikely that the relevant conditions have been met for any of these, to enable a deduction to be made in the capital gains computation. However as usual, under Self-assessment it is up to you to correctly self-assess any Capital gains or allowable losses in line with the legislation and to be able to substantiate this in the event of an enquiry. 
Thank you.