Sophisticated socialist receiving financial penalty (7)
I believe the answer is:
refined
'sophisticated' is the definition.
(similar in meaning)
'socialist receiving financial penalty' is the wordplay.
'socialist' becomes 'red' (red can informally mean a socialist).
'receiving' indicates putting letters inside.
'financial penalty' becomes 'fine' (a payment extracted as punishment).
'red' going around 'fine' is 'REFINED'.
(Other definitions for refined that I've seen before include "Free from vulgarity" , "Purified, oil say" , "Polished" , "Freed from impurities by processing" , "Urbane" .)