Former Rule
Under the repealed Capital Gains Tax Act, gains arising from the disposal of shares in Nigerian companies were exempt from Capital Gains Tax (CGT) where the total sales proceeds did not exceed ₦100 million within any 12 consecutive months. There was no separate threshold for the amount of gain realized.
The Nigeria Tax Act (NTA) 2025, effective 1 January 2026, expanded this exemption but introduced an additional condition.
The New Rule
A disposal of shares in a Nigerian company is exempt from CGT only where, within any 12 consecutive months, both of the following conditions are met:
Total sales proceeds are less than ₦150 million; and
Total chargeable gains do not exceed ₦10 million.
These conditions operate together. If either threshold is exceeded, the exemption is lost unless the option of reinvestment relief is applied. (Reinvestment relief encourages taxpayers to reinvest in Nigerian companies by exempting qualifying gains from CGT where the proceeds are reinvested within the same year of assessment. Where only part of the proceeds is reinvested, CGT applies only to the amount not reinvested, and the reinvestment must occur within the same year of assessment.)
Understanding the 12-Consecutive-Month Test
The Act does not use a calendar year test. Instead, it adopts a rolling 12-month period. This means the tax authority aggregates all share disposals occurring within any consecutive 12 months, regardless of whether they fall in different calendar years. For example, shares sold in July 2026 and February 2027 fall within the same 12-month period and are assessed together. The purpose is to prevent taxpayers from spreading disposals across different tax years simply to remain below the exemption thresholds.
However, the following queries on the act remain outstanding:
Is liability determined at each disposal date or only after it becomes clear that one of the thresholds has been exceeded? And what happens in a situation where an amended return becomes necessary?
How should taxpayers remit CGT while filing annual returns where disposals occur in different years of assessment but fall within the same rolling 12-month period?
Does the Act or any NRS guidance prescribe the administrative approach for monitoring rolling periods and enforcing the thresholds?