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The short answer
If you are UK resident, the return on Nigerian Treasury bills is foreign income that you normally need to consider for UK tax, even if the naira never leaves Nigeria. Overseas savings income goes on the SA106 foreign pages of your Self Assessment return, converted to pounds at the rate when the income arose. Nigeria now deducts 10% withholding tax on interest from short-term securities, and credit for it is generally available against the UK tax on the same income.
Is the T-bill return income?
A Nigerian Treasury bill pays no coupon. You buy below face value and are repaid at face value, and the difference is your return. Nigerian dealers and the press call it interest, and the Nigerian tax authority's 2025 notice on short-term securities treats it as interest for withholding tax. GOV.UK says UK residents normally pay UK tax on foreign income, naming foreign interest and dividends, usually reported through Self Assessment.
One technical point is worth flagging. HMRC's accrued income scheme helpsheet (HS343) says the scheme does not cover "most deeply discounted securities", which shows HMRC has separate rules for securities whose return comes as a discount. Exactly how HMRC classifies the discount on a Nigerian bill is a question for HMRC or a tax adviser if the sums are significant. The practical result for most people is the same: the return is taxable income in the year it is realised.
Where it goes on the return
HMRC's SA106 notes for 2026 place overseas interest in the interest boxes on the foreign pages, with columns for:
- Column A
- Country code: Nigeria is NGA.
- Column B
- The income in pounds before any foreign tax.
- Column C
- The foreign tax deducted.
- Column E
- An X if you are claiming foreign tax credit relief.
- Column F
- The taxable amount: column B if you claim relief, column B minus C if you do not.
If you have never filed a return, you will need to register for Self Assessment first, and there are deadlines for both registering and filing. See registering for foreign income for the dates that apply to you.
Converting naira to pounds
The SA106 notes say to convert using the exchange rate at the time the income arose, and point to HMRC's published exchange rates. HMRC publishes monthly and average rates. For a bill, the income arises at maturity, so use the rate for that date or month and keep a note of the source you used. Our guide to converting naira income at HMRC rates covers this in more depth.
Credit for the Nigerian withholding tax
Mondaq (Advocaat, November 2025) reports a 10% withholding tax on interest from short-term securities, naming Treasury bills. The UK–Nigeria treaty caps Nigerian tax on interest paid to a UK resident at 12.5% (Article 11), so a 10% deduction is within the cap. HMRC's HS263 sets the credit at the lower of the foreign tax paid and the UK tax on the same income. Keep the dealer's statement showing the deduction.
Worked example
Example only. A bill bought for ₦9,000,000 matures at ₦10,000,000: a discount of ₦1,000,000, with ₦100,000 withheld. At an example HMRC rate of ₦2,000 to the pound, you enter £500 in column B and £50 in column C. Suppose UK tax on that £500 at your rate is £100 (illustrative). Foreign tax credit is £50, the lower of £50 and £100, so £50 of UK tax remains. If your savings were covered by the personal savings allowance and no UK tax was due, there is no UK tax to set the credit against.
Allowances that may cover it
GOV.UK's savings page, updated 30 September 2026, gives the personal savings allowance as £1,000 for basic-rate taxpayers, £500 for higher-rate and nothing for additional-rate taxpayers. A starting rate for savings of up to £5,000 is available if your other income is under £17,570. Foreign interest counts towards these alongside UK interest. Being within an allowance does not always mean you need not report; check whether you are required to file a return at all.
Points people miss
- Rolling over a bill does not defer UK tax: each maturity is a separate realisation.
- Leaving the proceeds in Nigeria does not change the position for a UK resident under the current rules.
- Bills bought and redeemed within the same UK tax year still count, even if the money was never converted.
- Keep each dealer contract note: purchase price, face value, maturity date and tax deducted are the four numbers you need.
- If you were not UK resident when the bill matured, GOV.UK's foreign income guidance says non-residents pay UK tax only on UK income.
- Bills held through a Nigerian savings or investment app are still your income. The app's statement should show what was earned and any tax deducted; if it does not, ask for a breakdown before you file.
Where Pryme fits
Matured naira can sit in a Pryme account and be converted with Swap when you choose; the app shows the rate and the fee before you approve, and every conversion is on your statement for your records. Eva, the Personal Assistant can remind you of maturity dates.
Questions people ask
Do I pay UK tax on Nigerian treasury bills?
If you are UK resident, generally yes: the return is foreign income, reported on the SA106 foreign pages, with credit for Nigerian tax withheld.
Which exchange rate do I use for T-bill income?
HMRC's notes say the rate at the time the income arose; HMRC publishes monthly rates you can use, and you should record which you used.
Can I claim the 10% Nigerian withholding tax back?
You can usually claim it as a credit against UK tax on the same income, up to the UK tax due. Keep the dealer's statement.
Is my T-bill income covered by the personal savings allowance?
Foreign interest counts towards the allowance, so it may be, depending on your tax band and other savings income.
Sources
- GOV.UK: Tax on foreign income (updated 1 Oct 2026) · accessed Oct 2026
- HMRC: SA106 Foreign notes 2026 · accessed Oct 2026
- HMRC: Relief for foreign tax paid 2026 (HS263, updated 6 Apr 2026) · accessed Oct 2026
- GOV.UK: Tax on savings interest, how much is tax free (updated 30 Sep 2026) · accessed Oct 2026
- Mondaq (Advocaat Law Practice): FIRS imposes 10% withholding tax on interest on short-term securities (14 Nov 2025) · accessed Oct 2026
- HMRC: Accrued Income Scheme 2026 (HS343, updated 6 Apr 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.