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The short answer
For UK capital gains tax on Nigerian land, convert each figure into pounds at the exchange rate on its own date: the purchase price at the purchase date, each allowable cost when it was paid, and the sale price at the sale date. HMRC's manual says you must not work out the gain in naira and then convert it. Because the naira has fallen sharply, the sterling gain is often far smaller than the naira gain, and sometimes a loss.
This article is the arithmetic. If you need the wider picture of whether UK tax applies when you sell land at home, start with UK CGT on selling Nigerian land. Here we take one plot, follow it from purchase to sale, and show every conversion HMRC expects.
The rule: each figure at its own date
HMRC's Capital Gains Manual (CG78310, updated 22 October 2026) says that where an asset is bought and sold in a foreign currency, the cost is the sterling value at the date of acquisition and the proceeds are the sterling value at the date of disposal. The manual says not to compute the gain in the foreign currency and convert it. It does not name a required rate source; the rates must be reasonable and applied consistently, a point drawn from the tax cases it cites. Whatever source you use, record it.
Choosing a rate source
HMRC publishes monthly exchange rates and yearly averages (the averages appear on 31 March and 31 December). A gain needs more precision: CG78310 looks at the value on the day of purchase and the day of sale, so a daily rate for each of those dates is the closer fit. Whichever source you choose, use the same one for every date in the computation and keep a screenshot or printout.
What to gather before you start
- Deed of assignment, contract of sale or receipts showing the price and date paid.
- Receipts for allowable costs you paid when buying: legal fees, survey, consent and registration charges.
- Receipts for improvement work that is still reflected in the land, such as a fence or building, with dates.
- The sale agreement and the dates of exchange and payment.
- Selling costs: agent's commission, legal fees on the sale.
- An exchange rate for each date, with the source written down.
- Any receipt for Nigerian tax paid on the sale.
Not every expense counts. Check GOV.UK's guidance on deductible costs before including an item; routine upkeep is treated differently from improvements.
A full worked example
Example (all figures and rates are illustrative): Ngozi bought a plot in Ogun State in March 2015 and sold it in July 2026. She is a UK basic-rate taxpayer with £9,000 of her basic rate band unused, and no other gains this year.
| Item | Date | Naira | Example rate | Pounds |
|---|---|---|---|---|
| Purchase price | Mar 2015 | ₦4,000,000 | £1 = ₦300 | £13,333.33 |
| Legal and survey fees | Mar 2015 | ₦600,000 | £1 = ₦300 | £2,000.00 |
| Perimeter fence | Jun 2019 | ₦1,100,000 | £1 = ₦470 | £2,340.43 |
| Total cost | ₦5,700,000 | £17,673.76 | ||
| Sale price | Jul 2026 | ₦48,000,000 | £1 = ₦2,000 | £24,000.00 |
| Agent and legal fees on sale | Jul 2026 | ₦1,600,000 | £1 = ₦2,000 | £800.00 |
| Net proceeds | ₦46,400,000 | £23,200.00 |
Sterling gain: £23,200.00 − £17,673.76 = £5,526.24. The naira gain, by contrast, is ₦40,700,000, more than seven times the cost, which is why the naira figure is misleading for UK purposes.
From gain to tax
- Deduct the 2026-27 annual exempt amount of £3,000: £5,526.24 − £3,000 = £2,526.24 taxable.
- Ngozi has £9,000 of basic rate band left, so the whole £2,526.24 falls within it and is taxed at 18%: £454.72.
- Had she been a higher-rate taxpayer, the rate would be 24%: £606.30.
Rates and the allowance are from GOV.UK for 2026-27: £3,000, 18% within the basic rate band and 24% above it.
Nigerian tax and the credit
Nigeria may tax the same sale. PwC's summary (reviewed 29 May 2026) says individuals' chargeable gains are now taxed at the progressive personal income tax rates of 0% to 25%,. Nigerian tax is worked out in naira on the naira gain, so it can be larger than the UK tax on the sterling gain.
On the UK return, credit for Nigerian tax is the lower of the Nigerian tax and the UK tax on the same gain (HMRC HS263). In the example, if Nigerian tax converted to pounds came to £900, Ngozi's UK credit would be capped at £454.72 and she would pay nothing more in the UK. The extra £445.28 stays as a Nigerian cost. For both sides together, see tax on a property sale in both countries and Nigerian CGT for a UK resident seller.
Reporting it
GOV.UK says the real-time Capital Gains Tax service cannot be used to claim foreign tax credit relief on overseas property, so plan to report a Nigerian land sale on your Self Assessment return for the tax year of the sale. The 60-day reporting rule GOV.UK describes is tied to UK residential property, not land abroad. If the Nigerian tax is assessed after you file, read claiming foreign tax credit before Nigerian tax is paid.
Where Pryme fits
When the buyer pays in naira, a Pryme account can hold the proceeds in naira and you can convert with Swap when you decide. The conversion record and a verifiable statement help document the sale for HMRC and for your UK bank.
Questions people ask
Which exchange rate do I use for land bought years ago?
The rate on the date you bought it for the purchase price, the rate on each payment date for costs, and the rate on the sale date for the proceeds. Record the source you used.
Can I work out the gain in naira and convert it once?
No. HMRC's manual says to convert cost and proceeds separately at their own dates.
Can I use the real-time CGT service for land in Nigeria?
GOV.UK says the real-time service cannot be used to claim foreign tax credit relief on overseas property, so Self Assessment is the usual route.
Is there a 60-day deadline for overseas land?
The 60-day rule GOV.UK describes applies to UK residential property. Overseas land is reported on the annual return.
Sources
- HMRC Capital Gains Manual CG78310: computing gains on assets bought and sold in foreign currency (updated 22 Oct 2026) · accessed Oct 2026
- UK Trade Tariff: HMRC average exchange rates · accessed Oct 2026
- GOV.UK: Capital Gains Tax rates and allowances (updated 2 Oct 2026) · accessed Oct 2026
- GOV.UK: Report and pay Capital Gains Tax, other capital gains · accessed Oct 2026
- HMRC HS263: Relief for foreign tax paid (2026) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, income determination (reviewed 29 May 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.