UK Tax on Nigerian Dividends and Capital Gains: 2026/27

If you are resident in the UK, dividends and gains from Nigerian shares are generally taxable in the UK in the same way as other dividends and gains, and are reported on your Self Assessment return. Nigeria deducts 10% withholding tax from each dividend, and the UK usually gives a credit for that tax against the UK tax on the same dividend, up to the amount of the UK tax.

This article looks only at the UK side. For an overview of both countries, see Tax on Nigerian Investments for Diaspora Investors. For the Nigerian rules in more detail, see Withholding Tax on Dividends in Nigeria and Capital Gains Tax on Nigerian Shares.

What Nigeria Takes First

When a Nigerian company pays a dividend, 10% is deducted at source and you receive the rest. Under the Nigeria Tax Act 2025, in force from 1 January 2026, no further Nigerian tax is charged on a dividend received by a non-resident beyond the tax deducted at source, and the Act gives no right to a repayment of it. The UK-Nigeria double taxation agreement allows Nigeria to tax portfolio dividends at up to 15%, so the 10% actually deducted is within the treaty limit.

UK Tax on Nigerian Dividends in 2026/27

Dividends from foreign companies are taxed at the UK dividend rates. For the 2026/27 tax year (6 April 2026 to 5 April 2027):

• Dividend allowance: the first £500 of dividends in the year is taxed at 0%. It is shared across all your dividends, UK and foreign.
• Basic rate: 10.75%, up from 8.75% in 2025/26.
• Higher rate: 35.75%, up from 33.75% in 2025/26.
• Additional rate: 39.35%, unchanged.

Which rate applies depends on where the dividends fall once your other income has used up your personal allowance and bands. You are taxed on the gross dividend, meaning the amount declared before the Nigerian tax was taken off, not the net amount that reached your bank account.

Credit for the Nigerian Tax

Foreign Tax Credit Relief lets you set the Nigerian tax against the UK tax on the same dividend. The credit is the lower of the foreign tax paid, restricted to the rate the treaty allows, and the UK tax on that income. Two consequences follow:

• If a dividend falls within your £500 dividend allowance, no UK tax is due on it, so there is nothing to set the Nigerian tax against. HMRC's notes say you cannot claim the relief on that income.
• If the Nigerian tax is more than the UK tax on the dividend, the excess is not refunded by HMRC.

An illustration, assuming your dividend allowance is already used by other dividends: a Nigerian dividend worth £1,000 gross has £100 of Nigerian tax deducted. A basic-rate taxpayer owes £107.50 of UK tax, less the £100 credit, leaving £7.50 to pay. A higher-rate taxpayer owes £357.50, less £100, leaving £257.50. An additional-rate taxpayer owes £393.50, less £100, leaving £293.50.

Reporting on the Foreign Pages (SA106)

Nigerian dividends go in the "Dividends from foreign companies" section of the Foreign supplementary pages, SA106, which is also where Foreign Tax Credit Relief is claimed. You enter the gross amount and the Nigerian tax deducted, in sterling. HMRC works out the credit if you complete the relevant boxes and file by the deadline, or you can calculate it yourself using Helpsheet 263, Relief for foreign tax paid. HMRC's notes say to include all dividend income even when it is under £500, because it can affect the rate charged on the rest.

The dividend advice from the registrar normally shows the gross dividend, the tax deducted and the net amount paid. Keep one for every payment. Our guide How to Receive Nigerian Dividends Abroad explains how payments reach you.

Converting Naira to Sterling

HMRC's notes for the foreign pages say to convert foreign income into pounds using the exchange rate at the time the income arose, and point to HMRC's published yearly exchange rates if you are unsure. For gains, HMRC's guidance is that a cost paid in a foreign currency is converted at the rate on the date of acquisition, and proceeds at the rate on the date of disposal. Because each is converted on its own date, movements in the naira form part of the sterling gain or loss. A holding can show a gain in naira and a loss in sterling, or the other way round.

UK Capital Gains Tax When You Sell

A UK resident's gain on selling Nigerian shares is within UK Capital Gains Tax. For 2026/27 the annual exempt amount for individuals is £3,000. Gains above it are taxed at 18% to the extent they fall within your unused basic rate band, and at 24% above that; higher and additional rate taxpayers pay 24%. Gains on foreign shares are reported on the Capital Gains Tax summary pages, SA108, not on the foreign pages.

Can Nigeria Also Tax the Gain?

The UK-Nigeria agreement leaves capital gains to each country's own law, so it does not stop Nigeria taxing a gain. The Nigeria Tax Act 2025 charges non-residents on gains relating to assets located in Nigeria and treats shares in a Nigerian company as located in Nigeria. The same Act exempts an individual's gains on Nigerian company shares where disposal proceeds are below ₦150 million and gains do not exceed ₦10 million in any 12 consecutive months, and exempts proceeds reinvested in Nigerian company shares within the same year of assessment. How these rules are applied and collected for non-resident individuals who hold listed shares is not yet clear from published guidance, so confirm your position with a Nigerian tax adviser before a large sale. Capital Gains Tax on Nigerian Shares sets out the Nigerian rules.

If Nigerian tax is paid on a gain, the foreign pages have boxes for claiming credit for it against UK Capital Gains Tax, and the gain must also appear on SA108.

New UK Residents: the 4-Year FIG Regime

The remittance basis ended on 6 April 2025 and was replaced by the 4-year foreign income and gains (FIG) regime. It is open only to a qualifying new resident: someone in their first 4 years of UK residence after at least 10 consecutive tax years of non-UK residence. A claim is made each year on the SA109 pages, and relieves the chosen foreign income or gains from UK tax. A person who claims loses the tax-free allowances for Income Tax and Capital Gains Tax for that year, and cannot also claim Foreign Tax Credit Relief on income covered by the claim. Most Nigerians who have lived in the UK for some years will not qualify. If you used the remittance basis before April 2025, transitional rules apply to older income and gains, and these are a matter for your adviser.

Frequently Asked Questions

Do I pay UK tax on Nigerian dividends if Nigeria has already taxed them?

Possibly. The UK taxes the gross dividend at your dividend rate and gives credit for the 10% Nigerian tax, up to the UK tax on that dividend. At the 2026/27 basic rate of 10.75%, little UK tax is usually left; at the higher and additional rates, more is. Dividends within the £500 allowance carry no UK tax and no credit.

Which form do I use for Nigerian dividends?

The Foreign supplementary pages, SA106, in the section for dividends from foreign companies. Gains from selling Nigerian shares go on the Capital Gains Tax summary pages, SA108.

Does the UK-Nigeria treaty reduce the 10% Nigerian tax?

No. The treaty caps Nigerian tax on portfolio dividends at 15%, which is above the 10% Nigeria deducts, so the 10% applies. The treaty matters mainly because it confirms the UK gives credit for the Nigerian tax.

Which exchange rate should I use?

For dividends, HMRC's notes say the rate at the time the income arose, with HMRC's published yearly rates as a reference if you are unsure. For a gain, the cost is converted at the rate on the purchase date and the proceeds at the rate on the sale date. Use one consistent source and keep a note of it.