Capital gains tax on the sale of shares in Nigeria is now charged at the 30% company rate for corporate sellers. The old flat 10% rate has gone. Individuals pay at progressive income tax rates. Share sales are only exempt if proceeds stay under ₦150 million and the gain under ₦10 million in 12 months.
One Abuja holding company found this out after signing a deal. Here is what happened, and what fixed most of it.
This is a composite, anonymised scenario built from situations we see. No real client is described, and the figures are illustrative.
What was the problem?
A family-owned holding company in the construction sector agreed to sell its 40% stake in an operating subsidiary to a strategic investor. The price was ₦1.2 billion. The board approved it on the basis that capital gains tax is 10%, a figure the finance team had carried in its deal model since before 2026.
The shares had cost ₦400 million. On the team's numbers, the gain was ₦800 million and the tax ₦80 million. Nobody questioned it until the buyer's lawyers asked for a tax clearance position before completion.
What is the capital gains tax on the sale of shares in Nigeria?
The 10% flat rate has gone. According to the PwC Nigeria tax summary and Reanda International, companies are taxed on chargeable gains at the corporate rate of 30%, and individuals through the progressive personal income tax bands. The same sources report an exemption for share disposals where proceeds are under ₦150 million and the chargeable gain is under ₦10 million within any 12 consecutive months.
The Act also reaches indirect transfers, as Reanda notes. If a foreign parent that owns Nigerian shares changes hands, the Nigerian asset can still be caught.
The gap between the two rates in this deal was large:
- Expected: ₦80 million on the 10% assumption.
- Actual exposure: ₦240 million at 30% on a ₦800 million gain.
- Shortfall: ₦160 million, or 13% of the sale price.
How was it resolved?
The board asked VOG Global to review the transaction two weeks before completion. We took four steps.
1. Rebuild the cost base. We rebuilt the gain from the ledger rather than the deal model. The ₦400 million cost was only the original subscription. The holding company had also injected ₦150 million of further equity into the subsidiary over three years, but the board minutes and bank evidence were scattered across files. Once documented, the cost base rose to ₦550 million, the gain fell to ₦650 million, and the tax at 30% fell to ₦195 million.
2. Settle who bears the tax. The draft share purchase agreement was silent on who bore the tax. We put the computation in front of both sides before signing, so the price discussion happened with real numbers.
3. Provide for it. The ₦195 million was provided for in the holding company's books and held back from distribution to the family shareholders. Without that, the first dividend would have drained the cash needed to pay NRS.
4. Prepare the filing. The gain, the supporting documents and the payment were lined up before completion, so the tax clearance position the buyer wanted could be given without delay.
The sale still cost ₦195 million in tax, which is ₦115 million more than the board first expected. But that was known before signing, the cost base evidence had saved ₦45 million, and completion was not delayed.
What this means for your business
Any model built before 2026 that uses 10% for capital gains is wrong for companies. Check three things before you sign a sale of shares or a business.
- Is the seller a company or an individual? The rate and the rules differ.
- Can you prove the cost base? Subscriptions, further capital injections and acquisition costs all need board minutes and bank records.
- Does the sale fall inside the ₦150 million and ₦10 million share exemption? If you split a sale into tranches, remember the test runs over 12 months.
Confirm the filing deadline and payment timing with your adviser before completion. Buyers should ask what tax sits behind the shares they acquire. Related reading: our post on a ₦2.03bn tribunal ruling shows how contested tax positions play out when documents are thin.
FAQ
What is the capital gains tax rate for companies in Nigeria in 2026?
Companies pay the 30% corporate rate on chargeable gains under the Nigeria Tax Act 2025. The old flat 10% rate no longer applies to them. Small companies that qualify for the small company exemption are treated separately.
Is there an exemption for small share sales?
Yes. Share disposals are exempt where proceeds are under ₦150 million and the chargeable gain is not more than ₦10 million in any 12 consecutive months. Above either limit, the exemption does not apply.
Can I reduce the gain by claiming past investments in the company?
Where you can prove them, yes. Further capital injected into the company forms part of your cost, so a documented cost base lowers the taxable gain. Without records, the cost is hard to defend.
Selling a business or a stake in 2026? Contact VOG Global before you sign. We will compute the gain, test the cost base and plan the tax so the number is known on day one.