Nigeria Capital Gains Tax: Property, Shares and the ₦150m Threshold

How Nigerian capital gains tax works on property and shares, including the ₦150 million exemption threshold and worked examples.

· NairaTax Tax Advisory Team · 13 min read

Introduction

Capital Gains Tax (CGT) in Nigeria has undergone a dramatic transformation under the Nigeria Tax Act 2025. For investors, property owners, and business founders, understanding these changes is critical—the difference between planning properly and ignoring the rules can mean millions of naira in tax liability or savings.

The most significant change? A new ₦150 million proceeds threshold for share disposals that exempts most retail investors from CGT entirely. Combined with expanded reliefs for primary residences and clarified rules for real estate, these reforms fundamentally alter the investment landscape.

This comprehensive guide covers:

Whether you're selling shares after years of patient investing, disposing of rental property, or exiting your business, this article will help you navigate CGT legally and strategically.

Part 1: CGT Basics—What Is Capital Gains Tax?

Definition

Capital Gains Tax (CGT) is a tax on the profit (gain) you make when you sell or dispose of certain assets. The tax applies to the gain, not the total sale price.

Formula:

Chargeable Gain = Sale Proceeds - (Cost + Allowable Expenses)
CGT Payable = Chargeable Gain × CGT Rate

CGT Rate in Nigeria (2025)

Taxpayer Type CGT Rate
Individuals 10%
Companies 10%
Non-Residents 10% (may be reduced by tax treaty)

Note: The 10% rate is unchanged from previous years. What changed in 2025 are the thresholds, exemptions, and reliefs.

What Assets Are Subject to CGT?

Chargeable Assets (CGT Applies):

  1. Shares in Nigerian companies (quoted and unquoted)
  2. Real property (land, buildings, leaseholds)
  3. Business assets (goodwill, intellectual property)
  4. Units in trusts and collective investment schemes

Exempt Assets (No CGT):

  1. Nigerian Government Securities (FGN bonds, treasury bills)
  2. Life insurance policies (proceeds to beneficiaries)
  3. Personal belongings (jewelry, cars, furniture—unless used in business)
  4. Primary residence (new relief—see Part 4)
  5. Assets held until death (estate/inheritance tax applies instead)

Part 2: The ₦150 Million Threshold for Shares—Game Changer for Investors

The New Rule (Effective January 1, 2025)

Key Change: If your total proceeds from disposal of shares in a tax year are ≤ ₦150 million, you pay zero CGT—regardless of the gain amount.

What "Proceeds" Means:

Citation: BusinessDay reported that this threshold was introduced to encourage retail investor participation in Nigerian equities and reduce compliance burden on small-scale investors.

The "Cliff Effect"—Critical to Understand

This is not a graduated relief. It's an all-or-nothing threshold:

Total Sale Proceeds CGT Treatment
₦149,999,999 ❌ ₦0 CGT (exempt)
₦150,000,001 ✅ 10% CGT on entire gain

Example:

Investor A:

Investor B:

Investor B pays ₦10.1M more tax for just ₦2M extra proceeds!

Strategic Implications

1. Sell Across Multiple Years

If you have shares worth ₦300M (cost ₦100M), selling all at once triggers massive CGT:

Better Strategy:

2. Use Family Allocation

Each individual taxpayer has a separate ₦150M threshold. If you and your spouse each own shares, you can each sell up to ₦150M without CGT.

Example:

⚠️ Important: The transfer to your spouse must be genuine (not a sham to avoid tax). NRS (formerly FIRS) can challenge artificial arrangements.

3. Time Your Disposals

Avoid:

Instead:

💡 Use Our Calculator: The Capital Gains Tax Calculator lets you model different timing scenarios and see the exact tax impact.

Part 3: How CGT on Shares Is Computed (Step-by-Step)

Step 1: Determine Sale Proceeds

Sale proceeds = Total amount received from buyer

Include:

Example:

Step 2: Determine Acquisition Cost

Acquisition cost = Original purchase price + allowable expenses

Allowable Expenses:

  1. Brokerage fees (buying and selling)
  2. Stamp duties (on share certificates)
  3. Legal fees (related to acquisition)
  4. Valuation fees (if required)

Example:

Step 3: Calculate Chargeable Gain

Chargeable Gain = Sale Proceeds - Acquisition Cost
                = ₦135M - ₦82.7M
                = ₦52.3M

Step 4: Apply Threshold Test

Is total proceeds for the year ≤ ₦150M?

Step 5: File and Pay

Deadline: Within 30 days of disposal
Form: CGT-01 (Capital Gains Tax Return)
Payment: Via NRS Remita platform or designated banks

Late Filing Penalty: ₦25,000 + 10% of tax due + 5% monthly interest

Part 4: CGT on Real Estate—Property Rules Explained

Primary Residence Exemption (New!)

Major Relief Introduced in 2025:

If you sell your primary residence (main home), you are fully exempt from CGT—regardless of the gain amount.

Conditions to Qualify:

  1. Occupancy: You lived in the property as your main home for at least 2 years before sale
  2. Single property: It was your only or primary residence (not a vacation home or rental)
  3. No business use: You didn't claim business deductions (e.g., home office depreciation) for more than 10% of the property

Example:

Ada bought a house in Lekki in 2015 for ₦40M, sells in 2025 for ₦180M:

⚠️ Documentation Required:

Investment Properties (No Exemption)

Second homes, rental properties, commercial real estate: 10% CGT applies (no ₦150M threshold for property—that's shares only).

Example:

Chinedu bought a rental flat in 2018 for ₦25M, sells for ₦50M:

Allowable Deductions:

Not Deductible:

Land Disposals

Bare land (no building) is also subject to CGT:

Part 5: CGT on Business Assets—Goodwill, IP, Business Sales

Disposal of a Business (Asset Sale)

When you sell a business as a going concern, CGT applies to gains on:

  1. Goodwill (excess of purchase price over net asset value)
  2. Intellectual property (trademarks, patents, copyrights)
  3. Fixed assets (land, buildings, equipment)

Example:

TechStart Ltd. sells its software business:

Share Sale vs. Asset Sale:

Transaction Type CGT Treatment
Asset Sale (buyer acquires assets) CGT on each asset's gain
Share Sale (buyer acquires shares) CGT on shareholder's gain (₦150M threshold applies if individual)

💡 Tax Planning Tip: If you're a business owner exiting, a share sale is often more tax-efficient for you (₦150M threshold), while an asset sale benefits the buyer (step-up in depreciable base).

Part 6: Special Cases and Exemptions

1. Inherited Assets

Rule: When you inherit an asset, your acquisition cost is the market value on the date of death, not the original owner's cost.

Example:

Your father bought land in 1980 for ₦500,000. You inherit it in 2020 (market value ₦50M). You sell in 2025 for ₦80M:

Why? To avoid double taxation (estate tax was paid on the ₦50M value at inheritance).

2. Gifts Between Spouses

Rule: Transfers between husband and wife are CGT-exempt (no disposal occurs for CGT purposes).

Use Case: Tax planning—transfer assets to the spouse with more ₦150M threshold capacity.

3. Corporate Reorganizations

Exemption: Mergers, demergers, and share-for-share exchanges may qualify for CGT rollover relief (no immediate CGT, deferred until eventual disposal).

Conditions:

4. Small Business Relief (Proposed, Not Yet Enacted)

Watch This Space: The Act contemplates CGT relief for disposal of shares in qualifying small businesses (turnover <₦100M) after 5+ years. Awaiting implementation regulations.

Part 7: Worked Examples—Real-World Scenarios

Example 1: Retail Investor (Quoted Shares)

Profile: Ngozi bought 100,000 Dangote Cement shares in 2019 at ₦250/share.

2025 Disposal:

CGT Analysis:

Tax Saved: ₦1.95M (vs. 10% without threshold)

Example 2: Startup Founder (Unquoted Shares)

Profile: Emeka founded FinTech Ltd. in 2018, invested ₦10M for 40% equity. He exits in 2025.

2025 Sale:

CGT Analysis:

Tax Planning Option:

Example 3: Property Sale (Primary Residence)

Profile: Tunde sells his Lagos home (lived there 2010-2025).

2025 Sale:

Calculation:

Saved: ₦10.2M

Example 4: Property Sale (Investment Property)

Profile: Funmi sells a rental flat in Abuja (never lived there).

2025 Sale:

Calculation:

No exemption applies (not primary residence, not under ₦150M threshold—that's shares only).

Part 8: Filing and Payment Requirements

When to File

Deadline: Within 30 days of disposal date

"Disposal date" means:

How to File

  1. Register on NRS e-Services: https://www.firs.gov.ng
  2. Complete Form CGT-01 (Capital Gains Tax Return)
  3. Attach supporting documents:
    • Sale agreement
    • Purchase receipt/agreement
    • Evidence of allowable expenses (broker statements, legal invoices)
    • For property: Deed of Assignment, surveyor's report
  4. Pay via Remita (NRS generates payment code)
  5. Download receipt and CGT certificate

Required Documentation

For Shares:

For Property:

Keep for 6 years (NRS can audit within this period).

Part 9: Penalties and Enforcement

Late Filing

Penalty: ₦25,000 + 10% of tax due + 5% monthly interest

Example:

Underreporting Gains

Penalties:

NRS Audit Triggers

What makes NRS audit your CGT return:

  1. Visible wealth not matching reported income (property acquisitions, luxury purchases)
  2. Large discrepancy between sale price and property tax valuation
  3. Frequent disposals (appears as trading, not investing)
  4. Missing filings (sold property but no CGT return)

💡 Pro Tip: Always file, even if exempt. Filing shows compliance and prevents NRS inquiries.

Part 10: Advanced Strategies for CGT Minimization

Strategy 1: Loss Harvesting

Concept: Offset gains with losses in the same tax year.

Example:

⚠️ Limit: Losses can only offset gains in the same year. You cannot carry losses forward to future years.

Strategy 2: Installment Sales

Structure: Spread sale proceeds over multiple years.

Example:

Legal Requirement: Must be genuine installment arrangement (documented, interest charged).

Strategy 3: Corporate Wrapper

For large share portfolios: Hold shares in a holding company (Holdco).

Benefits:

Example:

⚠️ Risk: NRS may challenge if Holdco has no commercial substance (created solely for tax avoidance).

Strategy 4: Charitable Donations (Proposed Relief)

Watch for: Regulations on CGT exemption for gifts to registered charities/foundations.

Part 11: Frequently Asked Questions (FAQs)

What is the ₦150 million CGT threshold for shares?

If your total sale proceeds from disposal of shares in a tax year are ≤ ₦150 million, you pay zero CGT—regardless of the gain amount. This applies to individuals (not companies) and covers all share sales combined for the year (January 1 - December 31).

Is owner-occupied property still subject to CGT?

No. Under the Nigeria Tax Act 2025, your primary residence is fully exempt from CGT if you lived there for at least 2 years before sale. This exemption applies regardless of the gain amount—you could make ₦200M profit and pay ₦0 CGT.

How do I claim reliefs or exemptions?

For ₦150M share threshold:

For primary residence:

Filing is mandatory even if no tax is due.

Can I offset losses against gains?

Yes—in the same tax year only. If you sell Stock A for a ₦10M gain and Stock B for a ₦6M loss in 2025, your net chargeable gain is ₦4M. CGT = ₦4M × 10% = ₦400,000.

Losses cannot be carried forward to offset gains in future years (unlike Company Income Tax).

Part 12: Action Checklist

☐ Identify all CGT-liable assets you plan to dispose of
☐ Calculate total proceeds for shares (will you exceed ₦150M?)
☐ Plan disposal timing: Spread sales across years if approaching threshold
☐ Gather acquisition documents: Purchase receipts, brokerage statements, legal fees
☐ Check primary residence eligibility: Do you have 2+ years of occupancy proof?
☐ Compute chargeable gain using our Capital Gains Tax Calculator
☐ File CGT-01 within 30 days of disposal (even if exempt)
☐ Pay via NRS Remita (if tax due)
☐ Keep all documentation for 6 years (in case of audit)
☐ Consider loss harvesting if you have underperforming investments
☐ Consult tax advisor for transactions >₦100M or complex structures

Conclusion: CGT as an Opportunity, Not a Burden

The 2025 CGT reforms—especially the ₦150 million share threshold and primary residence exemption—represent a dramatic shift toward investor-friendly tax policy in Nigeria. For most retail investors, CGT is now effectively optional (avoidable with proper planning).

Key Takeaways:

  1. The ₦150M threshold is a powerful tool—use it strategically by timing disposals
  2. Primary residence relief is a massive win—document your occupancy now
  3. Filing is mandatory even if no tax is due (builds compliance history)
  4. Professional advice pays for itself for transactions >₦50M
  5. Don't let tax drive investment decisions—but do factor it into timing

The Bottom Line: With the right knowledge and planning, you can legally minimize or eliminate CGT on most investment gains. This guide gives you the foundation—now use it to make smarter financial decisions.

Related Reading

Tools & Calculators

Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or investment advice. CGT rules can be complex, especially for cross-border transactions, business disposals, and tax planning structures. Always consult a qualified tax advisor or chartered accountant before making disposal decisions.