Nigeria Capital Gains Tax Calculator

About the Nigeria Capital Gains Tax Calculator

Work out the tax on a gain from selling or otherwise disposing of an asset in Nigeria. The Nigeria Tax Act repealed the Capital Gains Tax Act and taxes gains as income: an individual's chargeable gains join the rest of that person's income and are taxed at the personal income tax rates, from 0% to 25%, and a company's gains join its profits and are taxed at the company rate of 30%, or 0% for a small company.

Enter what you received, what the asset cost and the costs of selling it. The calculator applies the exemption that fits the asset — shares below the ₦150,000,000 and ₦10,000,000 thresholds or reinvested, your home, personal belongings up to ₦5,000,000, up to two private cars a year, the first ₦50,000,000 of compensation for losing a job — and shows the chargeable gain, the tax by band and what you keep. Nothing you type leaves your browser.

How the gain is worked out

Gain = disposal proceeds − acquisition cost − costs of the disposal (Nigeria Tax Act, sections 39 and 40). For an asset of a trade or business on which capital allowances were claimed, its residue (the tax written-down value) is deducted instead of its cost. Expenditure that enhanced the asset's value counts with its cost: section 41 splits "the acquisition cost of the assets, together with any expenditure wholly and exclusively incurred for the purpose of enhancing the value of the asset" when part of an asset is sold, and the calculator deducts it the same way.

Where an asset changes hands otherwise than by a bargain at arm's length, the Act takes the consideration to be its market value (section 36). The exemption that fits your asset then comes off, and so do allowable losses, giving the chargeable gain.

Exemptions

• Shares in a Nigerian company (section 34(1)(a)): no chargeable gain when your disposal proceeds in any 12 consecutive months are, in total, less than ₦150,000,000 and the chargeable gain is ₦10,000,000 or less. Above either line, proceeds reinvested in shares of the same or other Nigerian companies in the same year of assessment keep their share of the gain exempt: tax falls only on the part of the proceeds not reinvested. Transfers in a regulated securities lending transaction are exempt too.
• Your home (section 51): an individual's gain on a dwelling-house and up to one acre of adjoining land not used commercially is exempt, once in a lifetime. When part of the house is used for a trade or profession, that part is apportioned and stays chargeable.
• Personal chattels (section 52): an individual's tangible movable belongings are exempt when the consideration for the disposal in a period of assessment is no more than ₦5,000,000 or three times the annual national minimum wage, whichever is higher. Two or more articles sold to the same or connected people count as one disposal.
• Motor vehicles (section 53): a vehicle used solely for private or non-profit purposes is not a chargeable asset, for up to two vehicles an individual disposes of in a year of assessment.
• Compensation (section 50): up to ₦50,000,000 of compensation or damages for loss of office or employment, or for a wrong or injury, is not a chargeable gain; whoever pays compensation for loss of office or employment deducts the tax on the excess when paying it. Sums received as death gratuities or as consolidated compensation for death or injuries are exempt (section 162(1)(k)).
• Gifts, charities, pension funds and startup investors: gains on a disposal by way of gift are not chargeable gains (section 54); nor are gains on property held in trust for public religious or charitable institutions, friendly and co-operative societies and trade unions, made outside a trade and applied to their purposes (section 55), the gains of those bodies, of governments and of educational, religious or charitable bodies of a public character on assets outside a trade or business (section 162(1)(a)), gains of pension funds under the Pension Reform Act (section 162(2)), and gains of angel investors, venture capitalists, private equity funds, accelerators and incubators on a labelled startup's assets held in Nigeria for at least 24 months (section 162(1)(m)).

The rate

There is no separate capital gains tax rate any more. An individual's chargeable gains are part of taxable income (section 28(2)(a)(v)) and pay the Fourth Schedule rates on chargeable income: the first ₦800,000 at 0%, the next ₦2,200,000 at 15%, the next ₦9,000,000 at 18%, the next ₦13,000,000 at 21%, the next ₦25,000,000 at 23% and the rest at 25% (section 58). The calculator taxes the gain on top of your other chargeable income, so it shows the bands the gain itself falls in.

A company's chargeable gains are part of its total profits (section 27(1)), taxed at 30%, or 0% for a small company with gross turnover of ₦100,000,000 or less and fixed assets of ₦250,000,000 or less (sections 56 and 201). The rate falls to 25% from a date the President sets by order. Companies that are neither small nor non-resident also pay the 4% development levy on their assessable profits (section 59); the Act counts chargeable gains in total assessable profits, so the calculator adds the levy, and you can leave it out.

When the gain is taxed

Under section 38 an asset is disposed of when there is an enforceable right to acquire it or a binding duty to dispose of it: for a conditional contract, when the condition is met; for an option, when it is exercised. For an individual, the Act counts the chargeable gains on assets disposed of in a year in the assessable income of the next year of assessment (section 26(3)), so enter the other chargeable income of that year; a year of assessment is the calendar year.

An individual's gains are administered by the Internal Revenue Service of the State where the individual lives, and a company's by the Nigeria Revenue Service (Nigeria Tax Administration Act, section 3).

Limitations

• One disposal at a time, by a person resident in Nigeria. Part disposals (section 41), assets lost or destroyed and replaced (section 43), payments by instalments over more than a year (section 42) and indirect transfers by non-residents (section 47) are not worked out.
• You enter the market value yourself where the Act requires it (gifts, transfers to connected persons); the calculator does not value assets.
• Section 39 names the acquisition cost; improvement costs are deducted as section 41 treats them for part disposals. Leave the field empty to follow section 39 alone.
• The 12-month share totals are yours to add up: the calculator checks the thresholds against the totals you enter, or against this sale alone when you leave them empty.
• The national minimum wage is the figure in the field; enter the new amount if it changes.
• An estimate from the Act’s rules, not tax advice: the relevant tax authority’s assessment decides what you pay.

Privacy

Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot.