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The short answer
HMRC lets you deduct day-to-day letting costs from Nigerian rent: agent fees, repairs that are not improvements, insurance, service charges and ground rent, utilities you pay, cleaning and security services, accountants' fees and advertising. You cannot deduct improvements or, as an individual, mortgage interest as an expense. Nigerian withholding tax on the rent is not an expense: it goes in the foreign tax box on SA106 and may be credited against UK tax.
If you are UK resident and own a flat in Lekki, a duplex in Gwarinpa or a shop in Onitsha, HMRC taxes the rental profit, not the gross rent. Getting the deductions right is the difference between a fair bill and an inflated one. This guide applies HMRC's published list to the costs Nigerian landlords actually face. It is information, not tax advice.
What HMRC allows
GOV.UK's page on paying tax on rental income (updated December 2024) lists these allowable expenses for residential lets. The second column shows how they usually look for a Nigerian property:
| HMRC's item | Nigerian example |
|---|---|
| Letting agents' fees | Agent or estate manager's commission on rent collected |
| Legal fees for lets of a year or less | Lawyer's fee for a one-year tenancy agreement |
| Accountants' fees | Fees for preparing your Nigerian and UK figures |
| Buildings and contents insurance | Fire or building policy on the flat |
| Maintenance and repairs (not improvements) | Fixing a leaking roof, repainting, replacing a broken pump |
| Utility bills, ground rent and service charges | Estate service charge, security levy, ground rent you pay |
| Council Tax | No direct equivalent; see Land Use Charge below |
| Services such as cleaning or gardening | Caretaker, cleaning or gardening paid by you |
| Other direct costs such as advertising | Listing fees for finding a tenant |
GOV.UK also offers relief for replacing domestic items used only by tenants, such as beds, sofas, curtains, carpets, fridges, crockery and cutlery, provided the old item is no longer used in the property. The first purchase of an item is not a replacement.
Agent fees
In Lagos, LASRERA guidelines reported by Famsville Solicitors cap an agent's rent commission at 10% of the total rent collected. Whatever you pay, keep the agent's statement showing the commission separately from rent; that is the evidence HMRC expects.
What HMRC does not allow
- Improvements and capital spending. GOV.UK excludes renovation beyond repairing wear and tear. Adding a boys' quarters, upgrading to marble tiles or building a fence for the first time are capital, not repairs.
- Mortgage interest as an expense. GOV.UK says companies can deduct loan interest but individual landlords paying Income Tax cannot claim it as an allowable expense. Ask HMRC or an adviser how finance costs are treated in your case.
- Nigerian withholding tax. When a company tenant deducts withholding tax on rent (PwC lists 10% on rent, hire and lease), that is tax, not a cost. It goes in the foreign tax box, explained below.
- Personal costs. Your own flights to inspect the property or family use of the flat need careful thought; claim only what is wholly for the letting.
Lagos Land Use Charge and long tenancies
GOV.UK names Council Tax but not foreign property charges. Lagos Land Use Charge is a local property charge, so it may be comparable, but HMRC's page does not say so; keep the receipt and confirm before claiming. Likewise, GOV.UK lists legal fees for lets of a year or less; it does not say fees for longer leases qualify. Two-year rent paid upfront is common in Nigeria, and how it is spread across UK tax years is worth checking too.
Putting it on SA106
HMRC's SA106 notes for 2026 put overseas rents in box 14, the property allowance in box 14.1, expenses in box 17, taxable profit in box 27 and foreign tax paid in box 28. Convert to pounds using the exchange rate at the time the income arose, as the notes say, and keep your workings. Property income from the UK and overseas combined of up to £1,000 is exempt and need not be reported; our guide to the £1,000 property allowance explains when relying on it makes sense. GOV.UK says you can carry a loss forward against future profits of the same business; see using a Nigerian rental loss.
Worked example
Example only, with assumed figures and an assumed rate of ₦2,000 to £1 (not a current rate). Chioma lets a Lekki flat to a company for ₦6,000,000 a year. The tenant deducts 10% withholding tax and pays her ₦5,400,000.
| Item | Naira | Pounds |
|---|---|---|
| Gross rent (box 14) | ₦6,000,000 | £3,000 |
| Agent commission at 10% | ₦600,000 | £300 |
| Roof and plumbing repairs | ₦450,000 | £225 |
| Estate service charge | ₦300,000 | £150 |
| Building insurance | ₦150,000 | £75 |
| Total expenses (box 17) | ₦1,500,000 | £750 |
| Profit (box 27) | ₦4,500,000 | £2,250 |
| Withholding tax (box 28) | ₦600,000 | £300 |
If Chioma is a higher-rate taxpayer, UK tax on £2,250 at 40% is £900; less a £300 credit, she pays £600. At the 20% basic rate it would be £450 less £300, or £150. Without the expenses she would have been taxed on £3,000. The credit rules are covered in our foreign tax credit guide.
What to check first
- Ask your agent for an annual statement listing rent, commission and each cost.
- Get withholding tax receipts from company tenants.
- Separate repairs from improvements before you fill in box 17.
- Record the exchange rate used for each item.
- Check whether you also owe Nigerian tax on the rent: see Nigerian tax for non-resident landlords.
Where Pryme fits
Collecting rent into a Pryme multicurrency account keeps Nigerian letting money in one place, and verifiable receipts and statements, made with our partner VerifyDoc.ai, give you records an agent, tenant or adviser can check.
Questions people ask
Can I deduct my agent's commission in Nigeria from rent for UK tax?
Yes. GOV.UK lists letting agents' fees as an allowable expense. Keep the agent's statement showing the commission.
Is Nigerian withholding tax on rent an expense?
No. It is foreign tax. HMRC's SA106 notes put it in box 28, and it may be credited against UK tax on the same rent.
Can I claim the cost of building a new boys' quarters?
No. GOV.UK excludes capital expenditure and improvements beyond repairs for wear and tear.
Which exchange rate do I use for Nigerian rent?
HMRC's SA106 notes say to convert using the exchange rate at the time the income arose. Keep your workings.
Sources
- Renting out a property: paying tax, GOV.UK · accessed Oct 2026
- Foreign (SA106) Notes 2026, HMRC · accessed Oct 2026
- Nigeria withholding tax, PwC Worldwide Tax Summaries (reviewed 29 May 2026) · accessed Oct 2026
- Mandatory registration requirements for real estate practitioners in Lagos State, Famsville Solicitors via Mondaq (Jul 2020) · 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.