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The short answer
If you are UK resident and Nigerian tax was taken off income that the UK also taxes, you can usually claim foreign tax credit relief on your Self Assessment return. Article 22 of the UK–Nigeria tax convention gives the credit, and HMRC limits it to the lower of the Nigerian tax (at no more than the treaty rate) and the UK tax on the same income. Any Nigerian tax above the treaty rate is not credited and has to be reclaimed in Nigeria.
Paying tax twice on the same rent or dividend is a common worry for Nigerians in the UK. In most cases the treaty and UK rules stop it, but only up to a point, and only if you claim. This guide explains how the credit works. It is information, not tax advice.
The legal basis
The UK and Nigeria signed a double taxation convention in London on 9 June 1987. It entered into force on 27 December 1987 and took effect in the UK for income tax and capital gains tax from 6 April 1988. Article 22 says the UK will allow a credit against UK tax for Nigerian tax paid on profits, income or gains from Nigerian sources. A plain-language overview is in our UK–Nigeria treaty guide.
HMRC's HS263 helpsheet also notes that where no treaty applies, or a treaty does not prevent tax in both countries, relief may still be available by credit or deduction. For Nigerian income, the treaty is the starting point.
How much you can claim
HS263 says the credit is the lower of two figures:
- the Nigerian tax paid, limited to the amount the treaty allows; and
- the UK tax due on the same item of income or gain.
So the credit can wipe out the UK tax on that income, but it cannot reduce UK tax on other income, and it is never refunded as cash.
Example 1: rent, credit less than UK tax
Example only, with assumed figures. Your Lagos rental profit is £1,200 after converting at the rate when the rent arose. Nigerian withholding tax of £150 was deducted; the NGEX diaspora guide hosted by NiDCOM gives 10% withholding on rent. Suppose your UK tax on that £1,200 is £240. The credit is £150, the lower figure, and you pay £90 of UK tax on the rent.
Example 2: credit capped by UK tax
Example only. If instead your UK tax on the same income were £100, the credit would be capped at £100 and £50 of Nigerian tax would go unrelieved.
Example 3: tax above the treaty rate
HMRC's own example in HS263 uses a £100 dividend with £20 foreign tax where the treaty rate is 15%: only £15 can be credited, and the £5 excess must be pursued with the foreign tax authority. Under Article 10 of the UK–Nigeria convention, Nigerian tax on dividends to an individual is capped at 15%; the NGEX guide gives a domestic rate of 10%, which is within that cap.
Gains and the other direction
The credit is not limited to income. Article 13 of the convention lets each country tax capital gains under its own law, so a gain on Nigerian land or shares can be taxed in both. Article 22(1)(a) covers Nigerian tax on gains as well as income, so the same lower-of rule applies; HS263 includes a capital gains example in which the credit is capped at the UK tax on the gain. See UK CGT on selling Nigerian land.
Article 22(3) works the other way: for a Nigerian resident, Nigeria allows a credit for UK tax on UK-source income. That matters to people who move back home but keep a UK income, such as rent from a UK flat.
When you cannot claim
- You are not UK resident. HMRC's SA106 notes list UK residence as a condition.
- You claim FIG relief on the same income. The notes say FTCR is not available where a FIG regime claim is made on it.
- No UK tax is due on it. The notes say that if your dividends fall within the dividend allowance and no UK tax is paid on them, you cannot claim FTCR on that income.
- Arrangements that are not commercial. Article 22(5) denies credit where transactions are not bona fide commercial arrangements.
Credit or deduction?
HS263 lets you choose to deduct the Nigerian tax from the income instead of claiming a credit. A credit is usually worth more, because it reduces tax pound for pound. HMRC says deduction is generally better only where there is no UK tax liability, for instance because of losses. You choose by whether you put an X in column E on SA106; see filling in SA106.
Evidence to keep
- Withholding tax receipts or credit notes from the Nigerian payer or agent.
- Bank or registrar statements showing gross amount, tax and date.
- Your conversion workings, using the rate when the income arose.
- For rent, the tenancy agreement and the agent's statement of deductions.
Without proof of the Nigerian tax, HMRC may refuse the credit. Our Nigeria guide to withholding tax for non-residents explains how credit notes are issued. For dividends specifically, see NGX dividends and UK tax.
Where Pryme fits
Claims depend on clean records. If your Nigerian income lands in a Pryme naira account, you can download a verifiable statement showing each credit and its date, which anyone can check is genuine and unaltered.
Questions people ask
Can I claim Nigerian tax against my UK tax bill?
Yes, usually, as foreign tax credit relief on your Self Assessment return, limited to the lower of the Nigerian tax (within treaty limits) and the UK tax on the same income.
What if Nigeria taxed me more than the treaty rate?
HMRC's HS263 says the excess over the treaty rate is not creditable in the UK. You would need to reclaim it from the Nigerian tax authority.
Is there a double tax treaty between the UK and Nigeria?
Yes. The convention was signed on 9 June 1987 and entered into force on 27 December 1987. Article 22 gives credit for tax paid in the other country.
Can I claim foreign tax credit relief and the FIG regime together?
Not on the same income. HMRC's SA106 notes say FTCR is not available where a FIG claim is made on that income.
Sources
- UK-Nigeria Double Taxation Convention, signed 9 June 1987 (GOV.UK) · accessed Oct 2026
- Relief for foreign tax paid 2026 (HS263), HMRC (updated 6 April 2026) · accessed Oct 2026
- SA106 Notes 2026: Foreign, tax year 2025 to 2026, HMRC · accessed Oct 2026
- NGEX Diaspora Guide to Nigeria's 2026 tax reforms, hosted by NiDCOM (Dec 2025/Jan 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.