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The short answer
Dividends on NGX-listed shares are paid after 10% Nigerian withholding tax. If you are UK resident, you report the gross dividend in pounds on the SA106 foreign pages and can usually claim foreign tax credit relief for the 10%, limited to the UK tax on that dividend. Below the £500 dividend allowance there is no UK tax to set the credit against, so the Nigerian tax is not recoverable that way.
What Nigeria takes first
Nigerian companies pay dividends through their registrars, net of withholding tax. Bamboo's guide to tax on Nigerian stocks (June 2026) states the rate as 10%, deducted before payment, and treated as a final tax for most individuals in Nigeria. The NiDCOM-hosted NGEX diaspora tax guide also gives 10%. The UK–Nigeria treaty caps Nigerian tax on dividends paid to UK residents at 15% for most shareholders, and 12.5% for a company holding at least 10% of the voting power (Article 10). A 10% deduction is already under the cap, so there is nothing to reclaim from Nigeria on treaty grounds.
What the UK charges
GOV.UK's dividends page, updated 30 September 2026, gives a dividend allowance of £500 and rates of 10.75% (basic), 35.75% (higher) and 39.35% (additional). Foreign dividends count towards the allowance like UK ones. The SA106 notes for 2026 say to include all dividend income, even if it is less than £500.
How the credit works
HMRC's HS263 helpsheet says foreign tax credit relief is the lower of the foreign tax paid (or the treaty-limited amount) and the UK tax on the same income. You claim it by entering the foreign tax and ticking for relief on the SA106.
Worked examples
Example only. You receive a gross Nigerian dividend worth £1,000 after conversion, with £100 withheld in Nigeria, and you have already used your £500 allowance on other dividends.
| Your band | UK tax on £1,000 | Credit allowed | UK tax left to pay |
|---|---|---|---|
| Basic rate (10.75%) | £107.50 | £100.00 | £7.50 |
| Higher rate (35.75%) | £357.50 | £100.00 | £257.50 |
| Additional rate (39.35%) | £393.50 | £100.00 | £293.50 |
If instead the whole £1,000 fell within your allowance, UK tax on it would be nil, so the credit would be nil too, and the £100 is simply lost. HS263 notes an alternative: deducting the foreign tax from the income rather than claiming a credit, which can be better mainly when there is no UK liability. In the allowance case, the effect is small, so most people simply claim nothing.
Filling in the SA106
- Gather each dividend advice for the tax year: gross amount, tax withheld and payment date.
- Convert each figure to pounds at the rate when the dividend was paid, as the SA106 notes direct.
- Enter the dividends in the foreign dividends boxes: NGA as the country code, the gross in column B and the Nigerian tax in column C.
- Put an X in column E to claim relief, and the gross in column F.
- Total your foreign tax credit relief in the box the form provides.
Holding through an app or nominee
If you own Nigerian shares through an investment app or a broker's nominee account, the registrar pays the dividend to the nominee and the platform credits you. The tax position is the same: the dividend is yours, and so is the withholding tax. What changes is the paperwork. Ask the platform for an annual statement showing each dividend gross, the tax deducted and the payment date. Without it, you would have to rebuild the figures from company announcements, which is slow and easy to get wrong.
Which tax year a dividend belongs to
The UK tax year runs from 6 April to 5 April. A dividend belongs to the year in which it was paid, not the company's financial year or the year it was declared. Many Nigerian companies pay final dividends between April and June, so a single company can pay a final dividend in one UK tax year and an interim in the next. Work from payment dates on the dividend advices, and keep a running list through the year rather than piecing it together in January.
Records that HMRC may ask for
- The registrar's dividend advice showing gross, tax and net amounts.
- The bank statement showing the net amount credited to your e-dividend account.
- Your exchange rate source and date for each conversion.
- Your CSCS or broker statement showing the holding on the record date.
If you have unclaimed dividends sitting with registrars, the amounts belong to the years they were paid, not when you collect them. See unclaimed dividends from abroad and getting dividends paid in the UK.
Common mistakes
- Entering the net dividend. HMRC wants the gross, with the tax shown separately.
- Claiming a credit above 10% because a broker statement shows other charges. Fees are not tax.
- Forgetting scrip or bonus issues and reinvested dividends, which may still be income.
- Converting at today's rate instead of the rate on each payment date.
Where Pryme fits
An e-dividend mandate can name a Nigerian account you run from the UK, such as the naira side of a Pryme multicurrency account. Each credit appears with its date, which is what your SA106 working needs, and Swap converts with the rate and fee shown before you approve.
Questions people ask
Do I pay UK tax on Nigerian dividends?
If you are UK resident and your dividends exceed the £500 allowance, generally yes, with credit for the 10% Nigerian tax withheld.
Can I claim back the 10% Nigerian withholding tax?
Not from Nigeria, since 10% is within the treaty cap. In the UK you claim it as a credit against UK tax on the same dividend.
Do I report Nigerian dividends under £500?
HMRC's SA106 notes say to include all dividend income, even if it is under £500, when you file.
What is the UK–Nigeria treaty rate on dividends?
Article 10 caps the source-country tax at 15% for most shareholders and 12.5% for companies holding 10% or more of the voting power.
Sources
- Learn With Bamboo: Tax on Nigerian stocks (26 Jun 2026) · accessed Oct 2026
- NGEX diaspora guide to Nigeria's tax reforms 2026 (NiDCOM PDF) · accessed Oct 2026
- UK–Nigeria Double Taxation Convention 1987 (GOV.UK PDF) · accessed Oct 2026
- GOV.UK: Tax on dividends (updated 30 Sep 2026) · accessed Oct 2026
- HMRC: Relief for foreign tax paid 2026 (HS263, updated 6 Apr 2026) · accessed Oct 2026
- HMRC: SA106 Foreign notes 2026 · 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.