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The short answer
If you are an Australian resident for tax purposes, the ATO says you must declare foreign income, including dividends and interest from Nigeria, and that selling an overseas asset may attract Australian capital gains tax. Amounts are converted to AUD under the ATO's rules: capital amounts at the time of each transaction, income when derived, or ATO average rates where allowed. You can claim a foreign income tax offset only for Nigerian tax actually paid, with records. From 1 July 2027 the 50% CGT discount is being replaced by indexation for gains accruing after that date.
Many Nigerians in Australia hold something at home: NGX shares, a money market fund, Treasury bills, a plot in Lekki. Once you are an Australian tax resident, those holdings belong on your Australian return as well. The rules are not exotic, but the currency conversion trips people up, and 2026 brought a change to capital gains tax that matters for anyone planning to sell in the next few years.
Who has to declare
The ATO's foreign income page says Australian residents for tax purposes must declare foreign income, and that investment returns are declared as if they arose in Australia. Holders of temporary visas are generally not taxed in Australia on most foreign income, the same page says. Residency for tax is its own test, separate from your visa; see the tax residency test and the temporary resident exemption.
What goes on the return
| Nigerian holding | What the ATO treats it as | Note |
|---|---|---|
| NGX dividends | Foreign dividend income | Keep the registrar's advice showing 10% Nigerian withholding tax |
| Bank or fixed deposit interest | Foreign interest | The ATO allows an offset for tax paid on it |
| Treasury bills, bonds, savings bonds | Interest, or a gain, depending on the instrument | Ask an adviser how a discount instrument is treated |
| Sale of shares, fund units, land | A CGT event on an overseas asset | Gain or loss worked out in AUD |
| Rent from Nigerian property | Rental income | The ATO includes rent from overseas properties |
Converting naira to AUD
This is where most errors happen. The ATO's resident foreign income page says you can use the exchange rate prevailing at the relevant time, or the ATO's published average rates. Its translation rules set the timing: an amount for a capital asset is translated at the time of the relevant transaction or event, and ordinary income at the earlier of when it is derived and when it is received.
For a capital gain, that means converting the cost at the exchange rate when you bought and the proceeds at the rate when you sold, then subtracting in AUD. A gain in naira can be a loss in AUD.
Example only, with invented rates
| Naira | Rate (₦ per AUD) | AUD | |
|---|---|---|---|
| Shares bought | ₦2,000,000 | 900 | 2,222.22 |
| Shares sold | ₦3,000,000 | 1,100 | 2,727.27 |
| Gain | ₦1,000,000 (50%) | 505.05 (22.7%) |
If the naira had fallen to ₦1,400 per AUD by the sale, the same ₦3,000,000 would convert to AUD 2,142.86, a capital loss of AUD 79.36 despite a 50% naira gain.
The foreign income tax offset
The ATO says you can claim a foreign income tax offset only if you have paid tax on the income overseas and have records proving it, and the foreign country must have the right to tax that income; if it does not, you ask that country for a refund. If your claim is more than $1,000 you must first work out your offset limit. The offset can differ from the tax you paid. For Nigerian dividends, the withholding tax on the registrar's advice is your evidence.
The 2027 CGT change
The ATO's capital gains tax reform page (updated 13 October 2026) says the first stage, the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, is law. From 1 July 2027 the 50% CGT discount for resident individuals is replaced by cost base indexation for gains accruing from that date, and a minimum 30% tax applies to individuals on certain net capital gains. Gains accrued before 1 July 2027 keep the current treatment, including the discount where you qualify. Most assets will need a market value as at 1 July 2027, generally first needed for the 2027-28 return. For a Lagos plot or a share portfolio, a dated valuation then will be worth having.
Records to keep
- Contract notes or purchase receipts with dates and naira amounts.
- Registrar dividend advices and bank interest statements showing Nigerian tax deducted.
- The exchange rate you used for each amount and where it came from.
- Sale documents and any costs of buying and selling.
The ATO says investment records should generally be kept for five years after it processes your return. See keeping cross-border records for the ATO. This is information, not tax advice; a registered tax agent can apply it to your facts.
Where Pryme fits
Clean records make all of this easier. Pryme lets any customer generate a regular or verifiable statement or receipt through its partnership with VerifyDoc.ai (receipts), and a multicurrency account keeps naira and dollar amounts in one history. Naira deposits are held by a licensed Nigerian microfinance bank, regulated by the CBN and insured by the NDIC up to the applicable limit, and outside Nigeria Pryme's activities are carried out through regulated partners.
Questions people ask
Do I pay Australian tax on Nigerian investments?
If you are an Australian tax resident, the ATO says you declare foreign income and may pay CGT when you sell an overseas asset. Temporary residents are generally not taxed on most foreign income.
Which exchange rate do I use for naira income?
The rate prevailing at the relevant time, or the ATO's published average rates where allowed. Capital amounts use the rate at the time of each transaction.
Can I claim Nigerian withholding tax against Australian tax?
Through the foreign income tax offset, if you paid it and have records. Claims over $1,000 need the offset limit worked out.
Is the CGT discount ending?
The ATO says it is replaced by indexation for gains accruing from 1 July 2027. Gains accrued before then keep the current treatment.
Sources
- ATO: Australian resident for tax purposes, foreign and worldwide income (updated 15 Jun 2026) · accessed Oct 2026
- ATO: Translation (conversion) rules for foreign currency (updated 1 Mar 2016) · accessed Oct 2026
- ATO: Investment income (updated 8 Jun 2026) · accessed Oct 2026
- ATO: Capital gains tax reform (updated 13 Oct 2026) · accessed Oct 2026
- ATO: Keeping good investment records (updated 22 Jun 2026) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, withholding taxes (reviewed 29 May 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.