What Is Capital Gains Tax?
A capital gain may arise when an asset is disposed of for more than its original cost. From 1 January 2026, the Nigeria Tax Act 2025 taxes an individual's chargeable gains at personal income tax rates (progressive bands), subject to the exemptions for share disposals and reinvested proceeds.
Capital Gains Tax. Capital gains tax (CGT) applies to chargeable gains arising on asset disposals. The Nigeria Tax Act 2025 replaced the previous capital gains tax framework from 1 January 2026.
How capital gains tax works
For individuals, chargeable gains are taxed at the individual's personal income tax rates (progressive bands), rather than the previous flat 10% rate. Whether an exemption applies to a share disposal depends on the conditions in the Nigeria Tax Act 2025.
What changed on 1 January 2026
The Nigeria Tax Act 2025 came into force on 1 January 2026 and replaced the previous capital gains tax framework. The former broad exemption for qualifying share disposals therefore does not describe the current rules.
Exemptions for individual share disposals
An individual's gains on disposing of shares are exempt where total disposal proceeds are below ₦150 million and chargeable gains do not exceed ₦10 million in any 12 consecutive months. Both conditions apply. Where share-disposal proceeds are reinvested in shares of Nigerian companies, the reinvested amount is exempt.
How the rules apply to a transaction
The outcome depends on the individual's total disposal proceeds, chargeable gains across the relevant 12 consecutive months, and any proceeds reinvested in shares of Nigerian companies. Confirm how these rules apply to your transaction with a qualified Nigerian tax adviser.
CGT vs withholding tax: different taxes for different income
Withholding tax applies to dividend income — it is deducted at source from dividends you receive. Capital gains tax applies to the profit on selling shares — it arises on disposal, not on income received. These are separate tax obligations with different mechanisms and rates. Understanding which applies to which type of investment return helps investors maintain accurate records and comply with applicable obligations.
Questions
About capital gains tax
This page is for general information and educational purposes only. It does not constitute tax advice, financial advice, or investment advice. The CGT position for Nigerian listed securities is subject to legislative change and should not be relied upon without verification. Always consult a qualified Nigerian tax adviser and refer to FIRS (firs.gov.ng) for current guidance before making any disposal decision. Shares Saver does not provide tax or financial advice.
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