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The short answer
If you are UK resident and sell shares listed on the Nigerian Exchange, the gain is liable to UK capital gains tax, worked out in pounds: the cost converted at the rate on the day you bought and the proceeds at the rate on the day you sold. For 2026-27 the first £3,000 of total gains is tax-free, and the rest is taxed at 18% or 24%. Any Nigerian tax on the same gain can be credited, but only up to the UK tax due on it.
Plenty of Nigerians in the UK hold a parcel of bank, telecoms or cement shares bought through a Lagos stockbroker years ago. When the naira price doubles, the instinct is to assume a big taxable gain. Often the sterling picture is very different, because HMRC does not care what happened in naira. It looks at pounds in and pounds out.
Who pays and when
UK residents are taxed on gains wherever the asset is, unless they are new arrivals using the four-year foreign income and gains regime, which LITRG notes also covers foreign gains (and costs you the annual exempt amount for that year). If you have left the UK, see the temporary non-residence rules before selling; HMRC helpsheet HS278 explains how some gains made while away are taxed on return.
The sterling computation
HMRC's Capital Gains Manual (CG78310, updated 22 October 2026) is clear on method: the cost is the sterling value at the date of acquisition and the proceeds are the sterling value at the date of disposal. You do not work out a naira gain and convert it. HMRC does not prescribe one rate source, but the rates should be reasonable and used consistently; a central bank or market reference rate for the date, noted with your workings, is a sensible record.
Worked example (illustrative)
| Naira | Example rate | Pounds | |
|---|---|---|---|
| Bought 10,000 shares at ₦300 | ₦3,000,000 | £1 = ₦1,000 | £3,000 |
| Sold 10,000 shares at ₦900 | ₦9,000,000 | £1 = ₦2,000 | £4,500 |
| Gain | ₦6,000,000 | £1,500 |
The naira price tripled, but the sterling gain is £1,500, which is inside the £3,000 annual exempt amount if you have no other gains. Had you sold when the example rate was £1 = ₦3,500, proceeds would be about £2,571 and you would have a sterling loss of about £429. Broker commissions and other dealing costs also need converting at their own dates; check GOV.UK's guidance on what costs you can deduct. If you bought the same company's shares in several lots, special matching rules decide which cost applies, so follow HMRC's share guidance before you calculate.
Rates and the allowance for 2026-27
GOV.UK gives these figures for the 2026-27 tax year:
- Annual exempt amount: £3,000 for individuals.
- 18% on gains that fall within your unused basic rate band (£37,700 of taxable income).
- 24% on gains above that, and for higher and additional rate taxpayers.
Example: a higher-rate taxpayer with a £13,000 sterling gain and no other disposals pays 24% on £10,000 (£13,000 − £3,000), which is £2,400.
Nigerian tax and the treaty credit
Nigeria taxes gains too. PwC's summary of the Nigeria Tax Act (reviewed 29 May 2026) says an individual's chargeable gains are now added to total income and taxed at the progressive personal income tax rates of 0% to 25%, replacing the old flat 10%. Whether a particular share sale is exempt, and how a non-resident pays, are points to confirm with a Nigerian adviser or your broker; we could not confirm the current exemption conditions from an official page.
The UK-Nigeria double tax convention leaves gains on shares to each country's own law (Article 13) and gives relief by credit (Article 22). On the UK side, foreign tax credit relief is the lower of the foreign tax paid and the UK tax on the same gain, as HMRC's HS263 sets out. A Nigerian tax larger than the UK tax is not refunded by HMRC. See foreign tax credit relief under the UK-Nigeria treaty and, for the treaty's wider scope, the UK-Nigeria double tax treaty explained.
What to check first
- Confirm you were UK resident in the tax year of the sale, and whether you claimed the foreign income and gains regime for that year.
- Find the contract note for each purchase and the date of each sale.
- Look up a rate for every purchase date and every sale date, from one source, and save the evidence.
- Convert the cost and the proceeds separately and subtract in pounds.
- Add any other gains you made in the same tax year before applying the £3,000 exempt amount.
- Ask your broker whether any Nigerian tax was deducted or is due, and get a receipt.
Reporting the sale
GOV.UK says UK residents can report other gains either on the Self Assessment return for the year or through the real-time Capital Gains Tax service (report by 31 December after the tax year, pay by 31 January). If you need to claim foreign tax credit, Self Assessment is the route to plan on. Keep the broker's contract notes, CSCS statements, the rate evidence for each date and any Nigerian tax receipts.
If dividends were paid while you held the shares, they are a separate income tax question: see NGX dividends and UK tax. To move sale proceeds, the broker pays into your Nigerian account first; see working with a Nigerian stockbroker from the UK.
Where Pryme fits
Naira proceeds can sit in naira in a Pryme account until you choose to convert them with Swap, where the rate is shown first and the fee is on its own line before you approve. That gives you a dated record of the rate you actually received.
Questions people ask
Do I pay UK tax on selling Nigerian shares?
If you are UK resident, yes: the gain is liable to UK capital gains tax, after the £3,000 annual exempt amount for 2026-27, at 18% or 24%.
Do I calculate the gain in naira or pounds?
In pounds. HMRC converts the cost at the purchase-date rate and the proceeds at the sale-date rate; you do not convert a naira gain.
Can the naira's fall give me a loss on shares that went up?
Yes. If the naira weakened more than the share price rose, the sterling proceeds can be lower than the sterling cost.
Will HMRC refund Nigerian tax I paid on the sale?
No. HMRC gives credit up to the UK tax on the same gain. Any Nigerian tax above that is not credited.
Sources
- HMRC Capital Gains Manual CG78310: computing gains on assets bought and sold in foreign currency (updated 22 Oct 2026) · accessed Oct 2026
- GOV.UK: Capital Gains Tax rates and allowances (updated 2 Oct 2026) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, income determination (reviewed 29 May 2026) · accessed Oct 2026
- GOV.UK: UK-Nigeria Double Taxation Convention (signed 9 Jun 1987) · accessed Oct 2026
- HMRC HS263: Relief for foreign tax paid (2026) · accessed Oct 2026
- GOV.UK: Report and pay Capital Gains Tax, other capital gains · 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.