Estimate tax on a share sale, noting the reinvestment roll-over relief.
Tax due now
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Chargeable gain
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Tax if not reinvested
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Net proceeds
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Selling shares is not a tax-free win
It is tempting to treat a profit on shares as money that simply appears, but in Nigeria a gain on disposing of shares is, in principle, taxable. Under the reformed regime the flat capital gains rate that older guides describe has gone, and an individual's chargeable gain is folded into their income and taxed at the personal income tax bands. This tool estimates that tax for an individual. You enter what you sold the shares for, what they cost you, and your other chargeable income for the year, and it works out the gain, the tax that gain adds, and your net proceeds. It also flags the reinvestment relief that can change the timing of the bill entirely.
It suits an individual investor who has sold or is about to sell shares and wants a realistic read on the tax consequence before the money is spent. Two ideas drive everything that follows, and both are easy to get wrong: the gain stacks on top of your other income, and the relief for reinvested proceeds defers tax rather than cancelling it.
Your gain lands on top of your income, not on its own
Because an individual's gain is taxed as income, it does not get its own gentle starting rate. It sits on top of whatever you already earn, so it is taxed at the band your income has already reached. If your salary or profit has already filled the lower bands, the entire gain can be taxed at a higher rate than you might expect from looking at the gain in isolation. This stacking is the most important mechanic the tool captures, and it is why the same gain produces a bigger tax bill for a higher earner. The band that applies is the rate this calculator uses, and since the 2025 reforms are still settling in around 2026, confirm the current treatment of share gains with the Federal Inland Revenue Service and your state internal revenue service before you rely on a figure.
Several genuine exemptions exist around this. Gains on the disposal of pension-fund assets are exempt, small gains below a relevant threshold in a 12-month period may escape tax, and the reinvestment relief discussed below can defer it. The tool models the core stacking calculation and the reinvestment flag; the finer exemptions are worth checking against current guidance because they can remove a charge entirely.
A NGN 3 million gain on top of an NGN 6 million income
Suppose you sell shares for NGN 8 million that cost you NGN 5 million, a gain of NGN 3 million, and you have NGN 6 million of other chargeable income for the year. Your NGN 6 million already fills the tax-free floor and the 15 percent band and reaches into the 18 percent band, so the NGN 3 million gain stacks entirely within the 18 percent band. The tax the gain adds is NGN 540,000, which is 18 percent of NGN 3 million. If you do not reinvest, that NGN 540,000 is due and your net proceeds are NGN 7,460,000. These figures use the rates this calculator applies.
Reinvestment relief delays the bill, it does not erase it
Tick the reinvestment box and the tax due now drops to zero, but read that carefully. Roll-over relief, where you reinvest the proceeds into shares of Nigerian companies, defers the tax until you eventually sell the new shares. It does not wipe it out. The tool still shows the gross tax that would otherwise apply, precisely so you can see the liability you are carrying forward rather than forgetting it exists. The cost base effectively rolls into the new holding, so the deferred gain resurfaces on the next disposal. Treating the relief as a permanent exemption is the classic mistake here, and it leads to an unwelcome surprise years later when the replacement shares are sold without any cash set aside.
There is also a record-keeping discipline that the deferral demands. To claim roll-over relief and to compute the eventual tax correctly, you need to track the original cost, the gain you deferred, and the details of the reinvestment, sometimes across many years. Keep the contract notes and the reinvestment evidence, because the relief is only as defensible as your paperwork. If you are reinvesting partly and taking some cash, the relief typically applies only to the reinvested portion, so the deferral is partial and some tax may still fall due now.
Does the gain affect the tax on my salary?
It increases your total tax for the year, but it does not retroactively raise the rate on your salary. The stacking means the gain is taxed at the band above your existing income, while your salary keeps the bands beneath it. So the gain bears the higher rate, not your whole income. The tool isolates exactly this by computing tax on your income with and without the gain and reporting only the difference.
What if I sold the shares at a loss?
Then there is no chargeable gain and no tax to compute, so the tool returns zero. A loss is not a gain, and the cost base exceeding the proceeds simply means nothing is added to your income. Whether such a loss can be set against other gains is a separate question governed by the rules on allowable losses, which you should confirm with the Federal Inland Revenue Service or a tax adviser, since the treatment can be specific and is among the areas the reform has touched.