I had to evict my tenant, who was not paying rent, incurring court fees and legal fees. Now that I have sold the property, can I deduct these costs for capital gains tax purposes? 

Arthur Weller replies:  

Court fees and legal fees to evict a tenant who was not paying their rent, in order to relet the property, are revenue expenditure, which can be offset against rental income, but not against capital gains. See HMRC’s Property Income Manual at PIM2120. However, HMRC’s Capital Gains Manual at CG71262 states: ‘If a landlord makes a payment to a tenant to procure the surrender of a lease, that payment will qualify as allowable expenditure under TCGA92/S38 (1)(b) (i.e., allowable enhancement expenditure), provided that it is reflected in the state or nature of the property at the date of its disposal by the landlord.’ So, if immediately after evicting the tenant, you put the property up for sale, it appears that CG71262 would be applicable.