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The short answer
Usually your country of residence taxes your worldwide income, Nigerian pension included, unless a tax treaty says otherwise. Nigeria itself exempts pensions and gratuities paid under the Pension Reform Act, so there is normally no Nigerian tax to credit. The UK–Nigeria treaty is the main exception: Article 18 says a pension for past employment is taxable only in the state the income comes from.
Start with the Nigerian side
Under the Nigeria Tax Act 2025, which took effect on 1 January 2026, pension income is part of an individual's chargeable income in principle, but pensions and gratuities paid in line with the Pension Reform Act (PRA) are exempt, as is the income of PRA pension funds. That is how both Adeola Oyinlade & Co. (writing on Mondaq) and the Premium Times summary of the Act describe it. So a monthly programmed withdrawal or annuity from your Retirement Savings Account, or a lump sum taken under PRA rules, should arrive without Nigerian income tax deducted.
Two points follow. First, because Nigeria takes nothing, there is usually no Nigerian tax to claim as a credit abroad. Second, the exemption is tied to the PRA: if an old employer pays you a private top-up outside that framework, ask how it was taxed before you assume it is exempt.
The general rule where you live
Most countries tax residents on their worldwide income. GOV.UK lists overseas pensions among the foreign income UK residents normally pay tax on, usually reported through Self Assessment. The IRS says US citizens and residents are taxed on worldwide income wherever they live. The Canada Revenue Agency asks residents to report the gross foreign pension on line 11500, converted to Canadian dollars at the Bank of Canada rate on the day received, or the annual average if paid at different times.
The question is whether a treaty changes that. Nigeria has comprehensive treaties with a short list of countries (see Nigeria's double tax treaties), and the pension article differs from treaty to treaty.
Country by country
| Where you live | Treaty with Nigeria? | What the treaty or local rule says about a Nigerian pension |
|---|---|---|
| United Kingdom | Yes, signed 9 June 1987 | Article 18(1): pensions for past employment, and annuities, paid to a resident of one state are taxable only in the state the income is derived from. A Nigerian PRA pension paid to a UK resident therefore falls to Nigeria to tax, and Nigeria exempts it. |
| Canada | Yes, in force 16 Nov 1999 | Article 18: pensions and annuities may be taxed in the residence state and may also be taxed where they arise, with no percentage cap. Report on line 11500; if a treaty-exempt part exists, deduct it on line 25600; claim any foreign tax on line 40500. |
| United States | No income tax treaty | The IRS treaty list has no Nigeria entry, so domestic US rules apply and the pension is reportable as worldwide income. |
UK: what "taxable only in" means in practice
Article 18(1) of the UK–Nigeria agreement is unusual: most modern treaties give pensions to the residence country. Here the source country keeps the right. If you are UK resident and receiving an RSA pension, the treaty position is that the UK should not tax it. You may still need to show it on your Self Assessment return and explain the treaty basis, so keep the paperwork and, if you use an adviser, ask them to cite Article 18 when they file.
The treaty covers pensions "in consideration of past employment". A voluntary contribution account or an investment product that only resembles a pension may not qualify. Ask your Pension Fund Administrator for a letter stating the payment is a retirement benefit under the PRA.
Canada: both countries may tax
Article 18 of the Canada agreement lets Canada tax as the residence state and Nigeria as the source state. Because Nigeria exempts PRA pensions, there is normally no Nigerian tax and no credit to claim; the pension is taxed in Canada as ordinary income. CRA notes it cannot refund foreign tax, so if a Nigerian payer deducted tax by mistake you would recover it from the Nigerian side, not from CRA.
United States: no treaty
Without a treaty, the pension is reported on your US return as part of your worldwide income, converted to dollars, under the ordinary US rules for pensions. Ask a US preparer how your particular payment type (annuity, programmed withdrawal or lump sum) is treated.
Worked example
Example only. Ngozi lives in Manchester and draws ₦600,000 a month from her RSA as a programmed withdrawal. Nigeria deducts no tax because it is a PRA pension. Under Article 18(1) of the UK–Nigeria agreement, the right to tax sits with Nigeria, so her UK tax on it should be nil; she keeps the PFA's annual statement and a letter confirming the PRA basis. Her brother Emeka draws the same amount in Toronto. Canada taxes it: at an assumed rate of ₦1,000 to C$1 (illustrative only) that is C$600 a month, C$7,200 a year, added to his other income on line 11500, with no foreign tax credit because none was paid.
What to check first
- Confirm the payment type with your PFA: programmed withdrawal, annuity, lump sum, or something outside the PRA.
- Check whether your country has a treaty with Nigeria and read its pension article.
- Keep the PFA statements showing gross amount and any tax deducted (see records to keep).
- Note the exchange rate on each payment date, or the annual average where your tax authority allows it.
- If you have retired abroad and the payout route is the problem, see getting a Nigerian pension paid abroad.
Where Pryme fits
A Pryme Personal Account can receive your pension in naira and hold it alongside GBP, USD or EUR, so you can see each payment on the day it lands and convert with Swap when you choose; the app shows the rate and the fee before you approve. Statements from the multicurrency account can be issued as verifiable documents if your adviser needs proof of the amounts.
Questions people ask
Is my RSA pension taxed in Nigeria if I live abroad?
Pensions and gratuities paid in line with the Pension Reform Act are exempt under the Nigeria Tax Act 2025, so normally no Nigerian tax is deducted. Payments outside the PRA framework can be taxable.
Do I pay UK tax on my Nigerian pension?
Article 18(1) of the 1987 UK–Nigeria agreement says pensions for past employment are taxable only in the state the income comes from, which points to Nigeria. Keep evidence that it is a PRA pension.
Does Canada tax a Nigerian pension?
Yes. The Canada–Nigeria agreement lets Canada tax as the residence state. Report it on line 11500 in Canadian dollars.
Is there a US–Nigeria tax treaty for pensions?
No. The IRS treaty list has no Nigeria entry, so the pension is reported under US domestic rules.
Sources
- The Double Taxation Relief (Taxes on Income) (Nigeria) Order 1987, Schedule · accessed Oct 2026
- GOV.UK: Tax on foreign income · accessed Oct 2026
- Mondaq (Adeola Oyinlade & Co.): Understanding personal income tax under the Nigerian Tax Act 2025 · accessed Oct 2026
- CRA: Line 11500 – Other pensions and superannuation · accessed Oct 2026
- Canada–Nigeria tax agreement (treaty text) · accessed Oct 2026
- IRS: United States income tax treaties A to Z · 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.