Know About Capital Gains Tax in Nigeria.

Capital Gains Tax (CGT) is a tax imposed by the government on a profit from the sale of property or an investment.

This tax is imposed when individuals or an organisation part with an asset and make gains on it”

This sales can either be a disposal or exchange of certain kinds of assets. In Nigeria, Capital Gains tax is 10% of the profits from the sale of the qualifying assets. It is recognized in law under the Capital Gains Tax Act, 2004 as amended and the Federal Inland Revenue of Nigeria (FIRS) is mandated to collect it.

Steps used in Computing CGT

The 4 steps involved in computing Capital Gains Tax in Nigeria are:

1. Identify what the Sales proceeds of the asset you disposed of
2. Deduct the allowable expenses as determined by the tax office to arrive at the Net Sales Proceeds.
3. Deduct the cost of acquiring the asset originally from the Net Sales proceeds to arrive at the Capital Gains.
4. Multiply
the Capital Gains by 10% to arrive at the Capital Gains Tax.
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