Capital Gains Tax (CGT) — Calculation Methodology
Calculates capital gains tax on asset disposals by determining chargeable gains, applying exemptions, and computing CGT using either progressive individual bands or a flat company rate.
Calculates capital gains tax on asset disposals by determining chargeable gains, applying exemptions, and computing CGT using either progressive individual bands or a flat company rate.
Determine Entity Type
Section 92The entity type is established: individual, large company, or small company. Small companies (turnover ≤₦50M, assets ≤₦250M) are exempt from CGT. Large companies pay a flat 30% rate aligned with CIT.
| Entity Type | CGT Rate | Notes |
|---|---|---|
| Individual | Progressive (0–25%) | Uses PAYE bands |
| Large Company | 30% (flat) | Aligned with CIT rate |
| Small Company | 0% (Exempt) | Turnover ≤₦50M |
Calculate Chargeable Gain per Asset
Section 92For each disposed asset, the chargeable gain is: disposal proceeds minus acquisition cost minus allowable expenses (legal fees, agent fees, improvement costs). If the result is negative, a capital loss is recorded.
Check Share Exemption
Section 92For share disposals, a special exemption may apply: if the individual’s total share disposal proceeds in the preceding 12 months do not exceed ₦150,000,000 and the gains do not exceed ₦10,000,000, the gains may be exempt from CGT.
Apply Tax Rate
Sections 92, 34(1)For individuals, chargeable gains are taxed using the same progressive bands as PAYE (0% to 25%). For large companies, a flat 30% rate applies. Capital losses reduce chargeable gains but cannot create a net tax refund.
Aggregate Multi-Asset Results
Sections 92–93Where multiple assets are disposed of, individual asset gains and losses are aggregated. Total CGT is the sum of per-asset liabilities. The net position (total gains minus total losses) and overall effective rate are computed for reference.
This methodology is provided for informational and educational purposes only. Tax calculations are estimates based on the information provided and the rates published in the Nigeria Tax Act 2025. Individual circumstances may vary. Consult a qualified tax adviser for personalised guidance.