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Capital Gains Tax (CGT)

Asset TaxLast Updated: 2025-12-12

What is Capital Gains Tax?

Capital Gains Tax (CGT) is charged on the profit (gain) you make when you sell or dispose of a valuable asset.

  • The logic: If you bought land for ₦10m and sold it for ₦15m, you have a Capital Gain of ₦5m. This gain is taxable.

Rate: 10% of the chargeable gain.

What Assets are Taxable?

CGT applies to "Chargeable Assets," which include:

  • Land and Buildings (Real Estate).
  • Options, debts, and incorporeal property.
  • Currency (other than Nigerian currency).
  • Assets situated outside Nigeria (if brought into Nigeria).

Exemptions: When Do You Pay Zero?

The law provides generous exemptions to encourage investment and protect individuals. You do NOT pay CGT on:

  1. Stocks and Shares: Gains from selling shares in Nigerian companies are generally exempt.
  2. Private Residences: Selling your principal private home (where you live).
  3. Compensation for Loss of Office: Up to ₦10 Million is exempt.
  4. Decorations: Gains on medals or decorations for valor.
  5. Life Insurance Policies.

Calculating the Tax

Formula:

Sales Proceeds - (Cost of Acquisition + Expenses of Sale) = Net Gain CGT = 10% of Net Gain.

Allowed expenses include professional fees (agents, lawyers), cost of improvement, and stamp duties paid.

Rollover Relief

If you sell a business asset (like a factory or machinery) and receive a gain, you can defer paying tax if you use the proceeds to buy a replacement asset for the same business purpose. This is called Rollover Relief.

How to File

  • Companies: File alongside your annual CIT returns via TaxPro-Max.
  • Individuals: File with your State IRS (e.g., via the state's e-tax portal).

Due Date: Twice yearly:

  • June 30th (for disposals Jan-Jun).
  • Dec 31st (for disposals Jul-Dec).

References & Resources