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The short answer
If you are UK resident, rent from a Lagos property is normally taxable in the UK and reported on the SA106 foreign pages of your Self Assessment return. You convert the naira to pounds at the rate when the income arose, deduct allowable expenses, and claim foreign tax credit relief for Nigerian tax on the same rent, capped at the UK tax due on it. New arrivals after ten years abroad may be able to claim the four-year foreign income and gains regime instead.
Who pays UK tax on foreign rent
GOV.UK says UK residents normally pay UK tax on foreign income, and lists overseas rent among the examples. Since 6 April 2025 the remittance basis has gone; the SA109 notes for 2026 say it is no longer possible to use it. The only broad exception now is the foreign income and gains (FIG) regime.
The four-year FIG regime
According to LITRG's guide, you can claim FIG relief if you are UK resident and were not UK resident in the ten consecutive tax years before you arrived. It lasts for at most four consecutive tax years from your first year of residence. You claim it on your return, by 31 January in the second tax year after the year concerned (for 2025/26, by 31 January 2028). The cost of claiming is that you lose your personal allowance and the Capital Gains Tax annual exempt amount for that year, and you cannot also claim foreign tax credit relief on the same income. If you moved to the UK recently, compare the two options before filing.
Working out the taxable profit
Overseas rental income goes on the SA106 foreign pages, in the property section (box 14 for rents, box 17 for expenses, box 28 for foreign tax). The SA106 notes say to convert income "using the exchange rate at the time the income arose" and point to HMRC's published exchange rates. With a yearly rent paid in one sum, that is the rate on the day it was paid.
The expenses GOV.UK lists for rental property include letting agents' fees, legal fees for lets of a year or less, accountants' fees, insurance, repairs (not improvements), utilities you pay, ground rent and service charges, cleaning and advertising. GOV.UK also says individuals cannot claim loan interest as an expense in the way companies can, so a mortgage on the property is handled differently; check HMRC's guidance on finance costs if you borrowed. There is a £1,000 property allowance that you can use instead of actual expenses when your expenses are small, and the SA106 notes say property income up to £1,000 in total, UK and overseas, does not need reporting.
Losses and empty periods
GOV.UK says a property loss can be carried forward and set against future profits of the same property business. A year in which the Lagos flat stood empty while you paid for repairs and service charges can therefore reduce tax in the next year, but only against later rental profits, not against your salary. Common mistakes on this page of the return are worth avoiding:
- Entering the net rent after Nigerian withholding tax instead of the gross rent, then claiming the credit as well.
- Converting the whole year at one rate when the rent arrived in instalments.
- Claiming improvements, such as an extension, as repairs.
How Nigerian tax is credited
Under Article 6 of the UK–Nigeria double taxation convention, income from immovable property can be taxed in the country where the property is. Nigeria taxes the rent first; the UK taxes it too and gives credit. HMRC's HS263 helpsheet says the credit is the lower of the foreign tax paid and the UK tax on the same income. Anything above that is not refunded by HMRC.
In practice the Nigerian tax is often the 10% withholding tax that a corporate tenant or agent deducts from rent, which PwC lists as the rate on rent, and the NiDCOM diaspora guide notes applies whatever the landlord's residence. Keep the withholding tax receipt; it is your evidence of foreign tax paid.
Worked example
An example with round numbers. Assume the rate when the rent arose was ₦2,000 to £1 and you are a basic-rate (20%) taxpayer.
| Item | Naira | Pounds |
|---|---|---|
| Yearly rent | ₦6,000,000 | £3,000 |
| Agent's commission at 10% | ₦600,000 | £300 |
| Repairs | ₦400,000 | £200 |
| Taxable profit | ₦5,000,000 | £2,500 |
| UK tax at 20% | £500 | |
| Nigerian withholding tax at 10% of rent | ₦600,000 | £300 |
| Credit allowed (lower of £300 and £500) | £300 | |
| UK tax left to pay | £200 |
If you are a higher-rate taxpayer the UK tax on the same profit is £1,000, the credit is still £300, and £700 is left to pay. GOV.UK publishes the 2026/27 bands: 20% up to £50,270, 40% to £125,140 and 45% above.
Filing steps
- Register for Self Assessment if you are not already. GOV.UK says to register by 5 October after the end of the tax year (for 2025/26, by 5 October 2026) or risk a penalty.
- Collect the year's rent receipts, agent statements and withholding tax certificates.
- Convert each item to pounds at the rate on the date it arose, using one consistent source.
- Complete the SA106 property boxes, entering "NGA" as the country code for any foreign tax.
- Keep records in case HMRC asks for them.
Tax rules here are general information, not advice. If you also own land you may sell, read Capital gains tax in the UK when you sell land in Nigeria, and for the day-to-day side see managing a Lagos rental from the UK.
Where Pryme fits
Clear records make this return easier. Rent paid into your Naira account details on a Pryme account leaves a dated record of each payment, conversions through Swap show the rate you used, and you can download a verifiable statement through VerifyDoc.ai to keep with your tax papers.
Questions people ask
Do I have to declare Nigerian rent to HMRC?
If you are UK resident, yes in most cases. GOV.UK lists overseas rent as foreign income that UK residents normally pay tax on, reported on the SA106 pages, unless you claim the FIG regime or total property income is £1,000 or less.
Which exchange rate do I use for naira rent?
The SA106 notes say to use the rate at the time the income arose. HMRC publishes exchange rates you can use; pick one source and apply it consistently.
Can I deduct the agent's commission in Lagos?
Yes. GOV.UK lists letting agents' fees among allowable expenses for rental property. Keep the agent's statement as evidence.
Is the Nigerian withholding tax refunded by HMRC?
No, it is credited. HS263 says credit is the lower of the foreign tax and the UK tax on the same income, so you never get back more than the UK tax on that rent.
Sources
- GOV.UK: Tax on foreign income · accessed Oct 2026
- LITRG: the foreign income and gains regime, tax years 2025/26 onwards (updated 6 Apr 2026) · accessed Oct 2026
- HMRC: SA106 Foreign notes 2026 · accessed Oct 2026
- GOV.UK: Renting out a property, paying tax (updated 12 Dec 2024) · accessed Oct 2026
- UK–Nigeria Double Taxation Convention 1987 (GOV.UK PDF) · accessed Oct 2026
- HMRC: Relief for foreign tax paid 2026 (HS263) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- NiDCOM: NGEX Diaspora Guide to the Nigeria Tax Reforms 2026 (Jan 2026) · accessed Oct 2026
- GOV.UK: Income Tax rates and Personal Allowances · accessed Oct 2026
- GOV.UK: Register for Self Assessment (updated 8 Oct 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.