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The short answer
A Nigerian subsidiary pays dividends to its UK parent out of profits after Nigerian company tax, deducting 10% withholding tax; the UK treaty caps dividend WHT at 12.5% for a 10%+ shareholder, so the lower 10% domestic rate applies. To buy foreign currency for the dividend at the official market, the parent's original investment should be registered with a Certificate of Capital Importation, and in the UK most dividends received by companies are exempt from corporation tax.
For a UK company that has invested in a Nigerian subsidiary, dividends are the normal way to bring profits home. The route has four checkpoints: Nigerian company tax, withholding tax, foreign exchange documentation and UK tax. Problems usually start at the third, so plan for it from the day the money first goes in.
Checkpoint 1: profits taxed in Nigeria
Dividends come from after-tax profits. The subsidiary first pays Nigerian company income tax and, unless it is a small company, the development levy; check the current rates and thresholds with its tax adviser. Directors declare the dividend under the subsidiary's articles and Nigerian company law; check the board and shareholder approvals with the company secretary.
Checkpoint 2: withholding tax
| Item | Rate | Source |
|---|---|---|
| Nigerian WHT on dividends to a non-resident company | 10% | PwC, reviewed May 2026 |
| UK-Nigeria treaty cap, company with 10%+ voting power | 12.5% | Treaty Article 10 |
| Treaty cap, other cases | 15% | Treaty Article 10 |
| Rate that applies | 10% (the domestic rate is already below the cap) | PwC lists UK treaty rate 10% |
The subsidiary deducts the WHT, pays it to the Nigeria Revenue Service by the 21st of the following month and gives the parent a receipt.
Worked example (illustrative)
Example: the subsidiary declares a dividend of ₦100,000,000. It withholds 10% = ₦10,000,000 and pays ₦90,000,000 net. At an illustrative ₦2,000 to £1, the net dividend is worth £45,000 before conversion costs. This is not a current rate; the bank's rate on the day applies.
Checkpoint 3: the CCI and foreign exchange
A Certificate of Capital Importation (CCI) is issued by an authorised dealer bank, on behalf of the CBN, when foreign capital comes into Nigeria. Mondaq's 2024 guide says it is issued within 24 hours of the inflow and enables repatriation of dividends, profits, interest and capital in convertible currency through an authorised dealer. Templars notes the CCI is not compulsory, but without one the investor cannot access the official FX market for repatriation.
- Make sure the original share capital or loan came in through a Nigerian bank that issued an e-CCI. Keep the CCI number.
- Mondaq says tax clearance is needed for dividend remittances; keep the WHT receipt and the subsidiary's tax clearance certificate.
- Board resolution, audited accounts and the dividend computation are usually requested by the bank.
- Ask the bank for its full document list before the dividend is declared.
If capital went in informally, for example through a director's personal transfer, ask a Nigerian lawyer how to regularise it before profits build up.
Checkpoint 4: UK corporation tax
Section 931B of CTA 2009 exempts dividends received by a small company where the payer is resident only in the UK or a qualifying territory, the distribution is not of certain non-dividend kinds, no deduction for it is allowed abroad, and it is not part of a tax advantage scheme. Nigeria appears on HMRC's list of territories with an appropriate non-discrimination article (INTM412090), the test behind 'qualifying territory'; confirm with your adviser that this covers your dividend. Larger companies look to other exempt classes in Part 9A of CTA 2009.
Because an exempt dividend carries no UK tax, the Nigerian 10% is usually a final cost rather than a creditable tax. Compare that with a management fee or interest, covered in management fees and CFC rules.
Timing the dividend
Dividends are usually declared after the subsidiary's accounts are approved, so build the bank's processing time into your plans. Practical points:
- Start the bank's document checks before the board meets, not after.
- Pay the WHT promptly after payment; the PwC summary gives the 21st of the following month for filing.
- If the naira is moving fast, the sterling value can change between declaration and receipt. Decide in advance whether you will convert on arrival or hold the currency received.
- Interim dividends follow the same steps and need the same documents.
Dividend or another route?
PwC's table gives the same 10% Nigerian WHT on dividends, interest, royalties and management fees paid to a non-resident company. A dividend comes from after-tax profit but is usually exempt in the UK; a management fee or interest may be deductible in Nigeria but is taxable income for the UK parent. The right mix depends on the facts, and Nigeria's transfer pricing rules apply to the fee and interest routes; see transfer pricing for UK-Nigeria groups.
Checklist
- CCI on file for the original investment.
- Audited accounts and distributable profits confirmed.
- Board and shareholder approvals.
- 10% WHT deducted, paid and receipted.
- Tax clearance and bank document list ready.
- UK adviser confirms the dividend exemption.
Where Pryme fits
When the dividend arrives in the UK, a Pryme Business Account keeps it in the currency it was paid in until you choose to convert with Swap, which shows the rate and fee first. Verifiable statements through Pryme's partnership with VerifyDoc.ai help when a bank or auditor asks for proof of receipt (receipts).
Questions people ask
What is the WHT rate on dividends from Nigeria to the UK?
10% for non-resident companies per PwC (May 2026). The treaty cap is 12.5% for a 10%+ shareholder, so the lower domestic rate applies.
Do I need a CCI to repatriate dividends from Nigeria?
It is not compulsory, but Templars notes that without one the investor cannot access the official FX market for repatriation.
Are dividends from a Nigerian subsidiary taxable in the UK?
Most dividends received by UK companies are exempt under CTA 2009 Part 9A, subject to conditions. Confirm with your adviser.
Can the UK parent claim credit for the Nigerian dividend WHT?
If the dividend is exempt in the UK, there is no UK tax to credit it against, so the 10% is usually a final cost.
Sources
- PwC Worldwide Tax Summaries: Nigeria, corporate withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- GOV.UK: 1987 UK-Nigeria double taxation agreement (in force) · accessed Oct 2026
- Mondaq (Adeola Oyinlade): How to repatriate capital and profits in Nigeria (19 Sep 2024) · accessed Oct 2026
- Templars: Repatriation of funds and capital importation in Nigeria, FAQs (c.2020) · accessed Oct 2026
- legislation.gov.uk: Corporation Tax Act 2009, section 931B · accessed Oct 2026
- HMRC International Manual INTM412090: SME exemption list of countries (updated 20 Oct 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.