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The short answer
Sometimes. If you sell a Nigerian asset such as shares or a let property, and its value in your home currency is below what you paid, the UK and Canada can treat that as a capital loss, because both convert cost and proceeds at their own dates. A loss on naira simply held in a bank account is usually not allowable in the UK, and in Canada a loss on personal-use property is not allowed. A loss on paper, with nothing sold, generally counts nowhere.
Why devaluation feels like a loss but may not be one for tax
If you saved ₦10,000,000 when it was worth £20,000 and it is now worth £5,000, you are poorer. For tax, though, three questions decide whether that becomes a usable loss: was there a disposal, what kind of asset was it, and does your country allow the loss for that asset? Nigeria will not help either way: Bloomberg Tax reports that under the Nigeria Tax Act 2025 capital losses are not deductible or available to offset gains, and the computation is in naira anyway.
United Kingdom
Naira in a bank account
HMRC's manual explains that from 6 April 2012 an individual's foreign currency bank account is treated as a simple debt, and no chargeable gain or loss arises for the original creditor. So the fall in value of naira sitting in a Nigerian bank account is generally not an allowable capital loss. Cash notes are a chargeable asset in principle (CG78300), but currency acquired for personal spending abroad is exempt.
Shares, land and other assets
For other assets, cost and proceeds are each converted at their own date's rate (CG78310). If the sterling proceeds are less than the sterling cost, the difference is a capital loss, even where you made a naira profit. Losses must be computed on a disposal, and reported on your return, to be used against gains.
Canada
- Investment property and shares. T4037 converts proceeds at the rate at sale and the adjusted cost base at the rate when acquired, so a currency-driven loss is a capital loss. A net capital loss can be applied to taxable capital gains of the three preceding years and of future years.
- Personal-use property. T4037 says you generally cannot claim a loss on personal-use property, such as a family house used mainly by you or relatives.
- Currency itself. Net gains or losses from foreign currency capital transactions are counted only above $200 for the year.
United States
US amounts are converted at the rate prevailing when each item is received or paid, so a Nigerian investment's cost and sale price are each measured in dollars. Section 988(e) of the Internal Revenue Code sets aside "personal transactions" of individuals, meaning those not connected to a trade or business or to investment, and the rules there are written around gains. Whether a particular naira loss is deductible depends on whether the asset was held for investment; ask a US preparer before claiming one.
Worked example
Example only; rates are illustrative. Tunde, resident in Canada, bought NGX shares for ₦20,000,000 when C$1 = ₦250 (cost C$80,000). He sold them for ₦30,000,000 when C$1 = ₦1,000 (proceeds C$30,000). He has a ₦10,000,000 profit in naira but a C$50,000 capital loss in Canada. With a one-half inclusion rate, as T4037 gives for 2024, the allowable capital loss is C$25,000, usable against taxable capital gains in the three previous years or later. Had the same naira sat in a Nigerian savings account, there would have been no disposal of an investment and, at most, a currency loss subject to the $200 rule.
When you cannot claim
- Nothing has been sold: an unrealised fall in value is not a loss for tax.
- The asset is personal-use (Canada) or a foreign currency bank balance (UK).
- You transferred the asset to a relative rather than selling it: the rules on gifts and connected persons apply instead.
- You cannot evidence the cost: without purchase documents and the rate on the purchase date, a loss is hard to defend.
Related: currency gains on naira assets, naira returns against currency loss and selling Nigerian shares as a non-resident.
Gifting or inheriting instead of selling
Transferring a falling naira asset to family does not crystallise a usable loss in the same way as a sale. In Nigeria, Bloomberg Tax notes that a gift is treated as a disposal at market value, while inheritance is not a chargeable disposal and heirs take the market value at death as their cost. Your country of residence will have its own rules for gifts between connected people, which often disallow or restrict losses. If you are thinking of moving a Nigerian asset to a sibling or child, work out the tax position in both countries first.
Evidence for a loss claim
A loss claim is examined more closely than a gain. Keep the purchase contract or contract note, proof of payment with its date, the exchange rate you used for that date and its source, the sale documents and the rate on the sale date. Without the purchase-date rate, a tax office cannot check the size of the loss.
Where Pryme fits
If currency risk is the worry, holding money in the currency you will spend it in is the simplest control. A Pryme multicurrency account holds NGN, USD, GBP and EUR separately, and money stays in the currency it arrived in until you choose to convert.
Questions people ask
Can I claim naira devaluation as a tax loss in the UK?
Not on naira held in a bank account, which is treated as a simple debt. On shares or property you sell, a sterling loss computed at each date's rate can be a capital loss.
Can I claim a Nigerian capital loss in Nigeria?
Bloomberg Tax reports that the Nigeria Tax Act 2025 does not allow capital losses to be deducted or offset.
Does Canada allow a loss on a family house in Nigeria?
Generally no. T4037 says losses on personal-use property are not allowed.
Do I need to sell to claim a currency loss?
Yes. An unrealised fall in value is not a tax loss.
Sources
- HMRC Capital Gains Manual CG78310: computation of gains on foreign currency and assets · accessed Oct 2026
- HMRC Capital Gains Manual CG78300: foreign currency · accessed Oct 2026
- CRA T4037 Capital gains · accessed Oct 2026
- Bloomberg Tax: New Nigeria tax law redefines capital gains tax for individuals · accessed Oct 2026
- 26 U.S. Code § 988 (Cornell LII) · accessed Oct 2026
- IRS: Foreign currency and currency exchange rates · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.