Nigeria Capital Gains Tax Guide 2026

Overview — Capital Gains Tax in Nigeria

Capital Gains Tax (CGT) in Nigeria is a separate tax from income tax, levied at a flat rate of 10% on chargeable gains realized on the disposal of assets. The tax is governed by the Capital Gains Tax Act (CGTA) Cap C1 LFN 2004 (as amended). It applies to individuals, companies, and other entities. The gain is the difference between the disposal proceeds and the acquisition cost, adjusted for incidental costs. Indexation allowance is not available. The tax is self-assessed and payable to FIRS.

CGT Rate — 10%

The capital gains tax rate is a flat 10% for all taxpayers — individuals, companies, and trusts. There is no distinction between short-term and long-term gains. The 10% rate applies to gains from: real estate (other than principal residence), shares (other than those listed on the Nigerian Exchange), business assets, intellectual property, and other chargeable assets. The rate has remained at 10% since the introduction of CGT in 1967, making it one of the most stable tax rates in Nigeria.

Exempt Assets and Gains

The following assets and gains are exempt from CGT: principal private residence (main home), Nigerian government securities (bonds, treasury bills), shares listed on the Nigerian Exchange (NGX), compensation for personal injury, gifts between spouses, gains on assets held for more than three years before death (subject to conditions), and gains on agricultural assets (limited to certain circumstances). Motor vehicles (unless used for business) are also exempt. The exemption for listed shares is a significant relief for stock market investors.

CGT on Real Estate

Gains on the disposal of real estate (other than the principal residence) are subject to 10% CGT. The gain is calculated as sale proceeds minus purchase price and incidental costs. There is no indexation for inflation, which means the real (inflation-adjusted) gain may be overestimated in periods of high inflation. CGT on property must be paid within three months of the date of disposal. The buyer should withhold 10% of the purchase price and remit to FIRS as an advance CGT payment where the seller cannot produce a tax clearance certificate.

CGT on Shares

Gains on shares listed on the Nigerian Exchange (NGX) are exempt from CGT. Gains on unlisted shares (private company shares) are subject to 10% CGT. The cost base includes the acquisition price and incidental costs. For shares acquired over time, the pooling method is used to determine the average cost base. This exemption for listed shares was introduced to encourage investment in the Nigerian capital market and has helped deepen the NGX.

Filing and Payment

Capital gains tax is self-assessed. The taxpayer must file a CGT return (Form CG 1) within three months of the date of disposal. Payment of CGT must accompany the return. Late payment attracts interest at the CBN minimum rediscount rate plus 5% per annum. Penalties for late filing or non-disclosure can be significant. It is advisable to engage a tax professional for CGT computations involving complex assets or partial disposals.

FAQs

Are foreign exchange gains subject to CGT?

Foreign exchange gains realized by individuals may be subject to CGT if they arise from the disposal of a chargeable asset. However, exchange gains on currency held for personal use are generally not taxable.

Is there a CGT exemption for retirement?

There is no general retirement exemption. However, gains on assets transferred to a pension fund or retirement savings account may be exempt under certain conditions.

Can I offset capital losses?

Capital losses can be offset only against capital gains in the same year. Unrelieved capital losses cannot be carried forward.

Disclaimer

This guide provides general information about capital gains tax in Nigeria for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Nigerian tax advisor or FIRS directly for advice specific to your situation. InvestmentKit does not provide tax advice.