Capital Gains Tax accrues on an actual year basis. It pertains to all gains accruing to a taxpayer (individual or company) from the sale or lease or other transfer of proprietary rights in a chargeable interest which are subject to a capital gains tax of 10%. Such chargeable assets may be corporeal or incorporeal and it does not matter that such

asset is not situated in Nigeria. Where however the taxpayer is a non-resident company or individual the tax will only be levied on the amount received or brought into Nigeria.

Computation of capital gains tax is done by deducting from the sum received or receivable, the cost of acquisition to the person realizing the chargeable gain, plus expenditure incurred on the improvement or expenses incidental to the realization of the asset. By virtue of section 26 of the Capital Gains Tax Act applicable in Nigeria some capital gains are exempted from taxation. For instance;

Gains of ecclesiastical, charitable or educational institutions, statutory and diplomatic bodies are exempted from taxation.

Where trustees or nominees transfer assets to beneficiaries they are not considered to be disposing of the assets, hence the transaction does not attract capital gains tax.

Other exemptions include gains made upon a disposal of business assets where the proceed are spent in acquiring new business assets; Gains made upon the disposal of or of

an interest in, the rights under any policy of assurance or contract for deferred annuity on the life of any person; Sums obtained by way of compensation or damages for any wrong or injury suffered by an individual; and gains made upon the disposal of a dwelling house.

Another important relief is one granted to businessmen or trade under section 32(1) of the Act, where old business assets are sold and the proceeds are used to procure new and similar business assets. In that case no gain would be considered to have occurred. For gains which are also liable to be taxed abroad, the double taxation treaties apply

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