Ley de Fiscalidad y Ganancias (Ley N° 44 de 1967, modificada por la Ley N° 45 de 1999), Nigeria

1. Taxation of capital gains

(1)

Subject to the provisions of this Act there shall be charged a tax to be called capital gains tax for the year of assessment 1967-68 and for subsequent years of assessment in respect of any capital gains, that is to say, gains accruing to any person on or after 1st April, 1967 on a disposal of assets.

(2)

Every such gain shall, except so far as otherwise expressly provided, be a chargeable gain.

(3)

In this Act, unless the context otherwise requires, any reference to a person shall include a reference

to any person to whom the Personal Income Tax Act applies. [1993 No. 104]

2. Capital gains tax

(1)

The rate of capital gains tax shall be ten percent.

(2)

Capital gains tax shall be chargeable at the rate mentioned in subsection (1) of this section on the total amount of chargeable gains accruing to any person in a year of assessment after making such deductions as may be allowed under this Act in the computation of such gains.

(3)

Capital gains tax to be assessed on any person under this Act shall be computed and charged in

accordance with the Provisions of this Act. [1999 No. 45.]

3. Chargeable Assets

Subject to any exceptions provided by this Act, all forms of property shall be assets for the purposes of this Act whether situated in Nigeria or not, including

(a)

options, debts and incorporeal property generally; [1972 No. 47]

(b)

any currency other than Nigerian currency; and

(c)

any form of property created by the person disposing of it, or otherwise coming to be owned without being acquired; and without prejudice to the foregoing provisions, this section shall have effect, notwithstanding that

(i)

Repealed by 1993 No.3

(ii)

Repealed by 1993 No.3

4. Asset situated outside Nigeria

Without prejudice to the foregoing provisions of this Act, as respects any chargeable gains accruing in the year 1967-68 or a later year of assessment from a disposal of assets situated outside Nigeria

(a)

where the disposal of assets is by an individual

(i)

who is in Nigeria for some temporary purpose only and not with any view or intent to establish his residence in Nigeria, and

(ii)

if the period or sum of the periods for which he is present in Nigeria in that year of assessment exceeds 182 days; or

(b)

Where the disposal is by any trustee of any trust or settlement and the seat of administration of the trust or settlement is situated outside Nigeria during the whole of that year of assessment; or

(c)

where the disposal is by a company, which is not a Nigerian company within the meaning of section 84 of the Companies Income Tax Act, that is to say, a company whose activities are managed and controlled outside Nigeria during the whole of that year of assessment,

[Cap. 60.] capital gains tax shall be chargeable on the amounts (If any) received or brought into Nigeria in respect of any chargeable gains, such amounts being treated as gains accruing when they are received or brought into Nigeria.

5. Exclusion of losses

In the computation of chargeable gains under this Act the amount of any loss which accrues to a person on a person on a disposal of any asset shall not be deductible from gains accruing to any person on a disposal of such asset.

Gains Chargeable To Tax

6. Disposal of Assets

(1)

Subject to any exceptions provided by this Act there is, for the purposes of assets by a person where capital sum is derived from a sale, lease, transfer, an assignment, a compulsory acquisition, or any other disposition of assets, not withstanding that no asset is acquired by the person paying the capital sum, and in particular

(a)

where the capital sum is derived by way of compensation for any loss of office or employment;

(b)

where any capital sum is received under a policy of insurance and the risk of any kind or damage or injury to, or the loss or depreciation of, assets;

(c)

where any capital sum is received in return for forfeiture or surrender of rights, or refraining from exercising rights;

(d)

where any capital sum is received as consideration for use or exploitation of any asset;

(e)

without prejudice to paragraph (a) of this section, where any capital sum is received in connection with or by virtue of any gain from any trade, business or vocation.

(2)

In this section and elsewhere in this Act

(a)

“capital sum” means any money or money's worth which is not excluded from the consideration taken into account in the computation under section 11 of this Act, and

(b)

references to disposal of assets include, except where the context otherwise requires, references to a part disposal of assets, and there is disposal of assets

(i)

where an interest or right in or over the assets is created by the disposal, as well as where it subsists before the disposal, and

(ii)

where, on a person making a disposal, any description of property derived from the assets remains undisposed of.

7. Disposal of assets: provisions as to considerations

(1)

Subject to provisions of this Act, a person's acquisition of an asset and the disposal of it to him shall, for the purposes of this Act, be deemed to be for a consideration equal to the market value of the asset

(a)

where he acquires the asset otherwise than by way of a bargain made at arm's length; or

(b)

where he acquires the asset wholly or partly for a consideration that cannot be valued, or in connection with his own or another's loss of office or employment or diminution of emolument, or

otherwise in consideration for or recognition of his or another's service or past services in any office or employment or any other service rendered or to be rendered by him or another; or

(c)

where he acquire the asset as trustee for creditors of the person making the disposal.

(2)

Where a person disposes by way of a gift of an asset he acquired by way of gift or otherwise (not being an acquisition on a devolution on death), the person acquiring the asset on that disposal shall, for all purpose of this Act, so far as relate to the interest taken by him, be deemed to have acquired the assets

(a)

in a case where the amount of the consideration for which the asset was last disposed of by way of a bargain made at arm's length is ascertainable, for a consideration equal to that amount; and

(b)

in any other case, for a consideration equal to the market value of the asset on the date of that disposal; and in this subsection “gift” does not include a donatio mortis causa.

(3)

In relation to any asset held by a person as nominee for another person, or as trustee for another person absolutely entitled as against the trustee, or for any person who would be so entitled but for being an infant or other person under disability (or for two or more persons who are or would be jointly so entitled), this Act shall apply as if the property were vested in, and the acts of the nominee or trustee in relation to the asset were the acts of, the person or persons for whom he is the nominee or trustee (acquisition from or disposal to him by that person or persons being disregarded accordingly).

(4)

The conveyance or transfer by way of security of an asset or interest or right in or over it, or transfer of a subsisting interest or right by way of security in or over an asset (including a re-transfer on redemption of the security), shall not be treated for the purposes of this Act as involving any acquisition or disposal of the asset.

(5)

Where a person entitled to an asset by way of security or to the benefit of a charge or encumbrance on an asset deals with the asset for the purpose of enforcing or giving effect to the security, charge or encumbrance his dealings with it shall be treated for the purposes of this Act as if they were done through him as nominee by the person entitled to it subject to the security, charge or incumbrance; and this subsection shall apply to the dealings of any person appointed to enforce or give effect to the security, charge or encumbrance as receiver and manager or judicial factor as it applies to the dealings of the person entitled as aforesaid.

(6)

An asset shall be treated as having been acquired free of any interest or right by way of security subsisting at the time of any acquisition of it, and as being disposed of free of any such interest or right subsisting at the time of the disposal; and where an asset is acquired subject to any such interest or right the full amount of the liability hereby assumed by the person acquiring the asset shall form part of the consideration for the acquisition and disposal in addition to any other consideration.

(7)

Where an asset is acquired by a creditor in satisfaction of his debt or part thereof, the asset shall not be treated as disposed off by the debtor or acquired by the creditor for a consideration greater than it's market value at the time of creditors acquisition of it, and if the chargeable gain accrues to the creditor of a disposal by him of the asset the amount of the chargeable gain (where necessary) shall be reduced so as not to exceed the chargeable gain which would have accrued if he had acquired the property for consideration equal to the amount of the debt or that part thereof.

8. Death

(1)

On the death of an individual any asset of which he was competent to dispose of shall for the purpose of this Act be deemed to be disposed of by him at the date of his death and acquired by personal representative or other person whom the asset devolve for a consideration equal to

(a)

in the case where the amount of the consideration for which the asset was last disposed of by way of a bargain made at arm' length bargain is ascertainable, that amount; and

(b)

in any other case, the market value of the assets at that date;

(2)

The gains which accrue in consequence of subsection (1) of this section shall not be chargeable to capital gains tax under this Act.

(3)

In relation to property forming part of the estate of a deceased person the personal representatives shall for the purposes of this Act be treated as being a single and continuous body of persons (distinct from the persons who may from time to time be the personal representatives), and that body shall be treated as having the deceased's residence and domicile at the date of death.

(4)

On a person's acquiring any asset as legatee

(a)

no chargeable gain shall accrue to the personal representative; and

(b)

the legatee shall be treated as if the personal representatives' acquisition of the asset had been his acquisition of it.

(5)

In this section reference to assets of which a deceased person was competent to dispose of are references to assets of the deceased which (otherwise than in right of a power of appointment) he could, if of full age and capacity, have disposed of by hiss will assuming that all the assets were situated in Nigeria and, if he was not domiciled in Nigeria, that he was domiciled in Nigeria.

(6)

If not more than two years after a death of the dispositions of the property of which the deceased was competent to dispose of whether by will, or under the law relating to intestacies, or otherwise, are varied by deed of family arrangement of similar instrument, this section shall apply as if the variations made by the deed or other instrument were effected by the deceased, and no disposition made by the deed or other instrument shall constitute a disposition for the purposes of this Act.

(7)

In this section“legatee” includes any person taking under a testamentary disposition or on an intestacy or partial intestacy whether he takes beneficially or as trustee, and a donatio mortis causa shall be treated as a testamentary disposition and not as a gift. “personal representatives” means

(a)

the executor, original or by representation, or administrator for the time being of a deceased person under law in force in Nigeria;

(b)

persons having in relation to the deceased under the law of another country any functions corresponding to the functions for administration purposes under any law in force in Nigeria or personal representatives as defined under paragraph (a) of this subsection, and reference to personal representatives as such shall be construed as references to the personal representatives of their capacity as having such function as aforesaid.

9. Compulsory acquisition of land

(1)

A person shall not be chargeable to tax under this Act in respect of any acquisition and disposal of land by reference to a disposal to an authority exercising or having compulsory powers, if that person had not

(a)

acquired the land at a time when or might reasonably have known that it was likely to be acquired by the authority; or

(b)

taken not taken any steps by advertisement or other-wise to dispose of the land or made his willingness to dispose of it known to the authority or others.

(2)

In this section “authority exercising or having compulsory power” means, in relation to any disposal of land, an authority, a person or body of person acquiring the land compulsorily under the Land Use Act, or any other enactment, or law of a country other than Nigeria, or who has or have been, or could be, authorised to acquire it compulsorily for the purposes for which it is acquired, for whom another authority, person or body of persons has or have been, or could be, authorised so to acquire it.

1. Repealed by 1998 No. 19
2. Date of acquisition or disposal, etc.

For the purposes of this Act any asset acquired or disposed of by any person chargeable to capital gains tax shall subject to section 23(4) of this Act be deemed to have been so acquired or disposed of at the date of the contract to acquire or dispose of the asset or at a date at which there is an enforceable right to acquire or a binding duty to dispose of the asset or any right or interest therein, and in particular

(a)

where any contract is to be performed subject to any condition the date of acquisition or disposal of asset shall be deemed to be the date when the condition is satisfied, but where a consideration of such a contract does not depend solely or mainly on the value of the asset at the time the condition is satisfied, the acquisition or disposal shall be treated as if the contract had never been conditional, in which case the date of the acquisition or disposal of asset shall be the date of the contract;

(b)

where an option is conferred by virtue of any contract, the date of the acquisition or disposal of asset shall be the date when the option is exercised.

CAPITAL GAINS

Computation

12. Computation of capital gains

In the computation of any chargeable gains under this Act, such gains as may be chargeable to tax shall, subject to the provisions of this Act, be the difference between the consideration accruing to any person on the disposal of an assets and any sum to be excluded from that consideration, and there shall be added to that sum the amount of the value of any expenditure allowable to such person on such disposal by virtue of this Act.

13. Exclusion from consideration for disposals of sums chargeable to income tax

(1)

There shall be excluded from the consideration for a disposal of assets taken into account in the computation of the gain accruing on that disposal any money or money's worth charged to income tax as income of, or taken into account as a receipt in the computing income or profits or gains or losses of the person making the disposal for the Personal Income Tax Act, the Companies Income Tax Act or the Petroleum Profits Tax Act, which Acts are hereafter jointly referred to as “the income Tax Acts”.

[1993 No. 104. Cap. 60. Cap. 354.]

(2)

Subsection (1) above shall not be taken as excluding from the consideration for the disposal of an asset any money or money's worth which is taken into account in the making of a balancing charge under the Income Tax Acts.

14. General provisions as to allowable expenditure

(1)

In the computation of capital gain the sum allowable as a deduction from the consideration accruing to a person on the disposal of an asset shall be restricted to

(a)

the amount or value of the consideration, in money or money's worth given by him or on his behalf wholly, exclusively, and necessarily for the acquisition of the asset, together with the incidental cost to him of the acquisition or, if the asset was not acquired by him, any expenditure wholly, exclusively and necessarily incurred by him in providing the asset;

(b)

any amount of an expenditure wholly, exclusively and necessarily incurred on the asset by him or on his behalf for the purposes of enhancing the value of the asset being expenditure reflected in the sate or nature of the asset at the time of the disposal;

(c)

the amount of an expenditure wholly, exclusively and necessarily incurred on the asset by him or on his behalf in establishing, preserving or defending his title to, or a right over, the asset; and

(d)

the incidental cost of making the disposal.

(2)

For the purpose of this section and any other provision of this Act, the incidental costs to the person making the disposal of the acquisition of the asset or of its disposal shall consist of expenditure wholly, exclusively and necessarily incurred by him for the purposes of the acquisition or, as the case may be, the disposal, being fees, commission or remuneration paid for the professional services of any surveyor

or valuer, or auctioneer, or accountant, or agent, or legal adviser and costs of transfer or conveyance (including stamp duties) together

(a)

in the case of acquisition of asset with cost of advertising to find a seller; and

(b)

in the case of disposal, with cost of advertising to find a buyer and cost reasonable incurred in making any valuation or apportionment required for the purpose of computation of capital gains, including in particular, expenses reasonably incurred in ascertaining market value where required under this Act.

15. Exclusion of expenditure deductible for income tax purposes.

(1)

There shall be excluded from the sum allowable under section 14 of this Act as a deduction in the computation under this Act any expenditure allowable as deduction in computing the profits or gains or losses of a trade, business, profession or vocation for the purposes of income or profit or gain or losses for the purposes of the Income Tax Acts and any expenditure which, although not allowable as a deduction in computing any losses, would be so allowable but for an insufficiency of income or profits or gains and this section applies in respective of whether effect is or would be given to the deduction in computing the amount of tax chargeable or by discharge of payment of tax or in any other way.

(2)

Without prejudice to the provisions of subsection (1) of this section there shall be excluded from the sums allowable under section 14 of this Act as a deduction in the computation under this Act any expenditure which, if the assets, or all the assets to which the computations relates, were, and had at all times been, held or used as part of the fixed capital of trade or business the profits or gains of which ere (irrespective of whether the person making the disposal is a company or not) chargeable to income tax would be allowable as a deduction in computing the profits or gains or losses of the trade for the purposes of income tax.

(3)

The foregoing provisions of this section shall not require the exclusion from the sums allowable as a deduction in the computation under this Act of any expenditure as being expenditure in respect of which capital allowances are granted under the Income Tax Acts.

16. Special provisions as to deductions of insurance premium

Without prejudice to section 13 of this Act, there shall be excluded from the sums allowable as a deduction in the computation under this Act of the gain accruing to a person, on the disposal of an asset, any premiums or other payments made under a policy of insurance against the risks of any kind of damage or injury to, loss or depreciation of, any asset.

COMPUTATION

Miscellaneous

17. Part disposal

(1)

Where there is a part disposal of an asset within the meaning of section 6(2) of this Act and generally wherever on the disposal of an asset any description of property derived from that asset remains un disposed of, the sums representing the amount or value of the consideration for the acquisition of the asset ( in this Act referred to as the cost of acquisition of the asset) together with any amount of expenditure wholly, exclusively and necessarily incurred on the asset for the purpose of enhancing the value of the asset as are attributable to the asset shall, both for the purposes of the computation under this Act and in relation to the property which remains undisposed of, be apportioned.

(2)

Apportionment shall be made by reference

(a)

to the amount or value of the consideration for the disposal on the one hand( call that amount or Value A), and

(b)

to the market value of the property which remains indisposed of on the other hand ( call that amount Value B),

and accordingly the fraction of the said cost or sums allowable as a deduction in computing under this Act the amount of the gain accruing on the disposal shall be A/A + B and the remainder shall be attributed to the property which remains undisposed of.

(3)

Where there is a disposal of an interest or right in or over a chargeable asset created by the disposal or where it subsists before the disposal, and on the making of the disposal any description of property derived from the asset remains undisposed of, there shall be apportioned the amount or value of the consideration in money or money's worth given by him or on his behalf wholly and exclusively for the acquisition of the asset together with the incidental cost to him of the acquisition or any expenditure wholly or exclusively incurred by him in providing the asset as against the market value of the property.

18. Consideration due after time of disposal

(1)

If the consideration or part of the consideration taken into account in the computation of capital gains under this Act is payable by installments over a period beginning not earlier than the time when the disposal is made, being a period exceeding 18 months, the chargeable gain accruing on the disposal shall be regarded for the purpose of this Act as accruing in proportionate parts in the year of assessment in which the disposal is made and in each subsequent years of assessment down to and including the Year of assessment in which the last installment is payable.

(2)

The proportionate parts to be recorded as accruing in the respective years of assessment shall correspond to the proportions of the amounts of the installments of consideration payable in those respective years of assessment.

(3)

The time in the year or accounting period when any such part of a chargeable gain is deemed to accrue under this section shall be the last day in that year of assessment.

(4)

Subsection (1) of this section shall not apply to any part of the consideration which has effectively passed to the person making the disposal by way of a loan made to that person by the other party to the transaction.

(5)

In the computation of chargeable gains under this Act consideration for the disposal shall be brought into account without any discount for the postponement of the right 00 receive any part of it and. in the first instance, without regard to a risk of any part of the consideration being contingent; and if any part of the consideration so brought into account is subsequently shown to the satisfaction of the Board to be irrecoverable, such adjustment, whether by way of discharge, or repayment of tax or otherwise, shall be made as is required in consequence.

19. Assets lost or destroyed

(1)

if an asset, whether under a policy of insurance or otherwise, is lost or destroyed, and a capital sum received by way of compensation for the loss or destruction is applied within three years of receipt in acquiring another asset in replacement of the asset lost or destroyed, the owner shall if he so claims be treated for the purposes of this Act

(a)

as if the consideration for the disposal of the old asset were (if otherwise of a greater amount) of such amount as would secure that on the disposal neither a loss nor a gain accrues to him; and

(b)

as if the amount of the consideration for the acquisition of the new asset were reduced by the excess of the amount of the capital sum received by way of compensation or under the policy of insurance, together with any residual or scrap value, over the amount of the consideration which he is treated as receiving under paragraph (a) of this subsection.

(2)

A claim shall not be made under subsection (1) of this section if part only of the capital sum is applied in acquiring the new asset but if all of that capital sum except for a part which is less than the amount of the gain (whether all chargeable gain or not) accruing on the disposal of the old asset is to be applied, then the owner shall if he so claims be treated for the purpose of this Act

(a)

as if the amount of the gain so accruing were reduced to the amount of the said part (and, if not all chargeable gain, with a proportionate reduction in the amount of the chargeable gain); and (b) as if the amount of the consideration for the acquisition of the new asset were reduced by the amount by which the gain is reduced under paragraph (a) of this subsection.

20. Bargains comprising two or more transactions

(1)

Where a single bargain comprising two or more transactions whereby assets are disposed of, those transaction shall be treated for the purpose of computing capital gains as a single disposal.

(2)

Where separate consideration are agreed or purported to be agreed for any two or more transactions comprised in one bargain (whether transaction whereby assets are disposed off or not ) those considerations shall be treated as altogether constituting an entire consideration for the transactions and shall be apportioned between them accordingly.

(3)

Where any apportionment under this section shall result in lesser consideration than that agreed (or purported to be agreed) in the bargain being attributable to the disposal of the assets, the separate considerations agreed( or purported to be agreed) in respect of those assets shall be deemed to be consideration for which those assets are disposed of.

21. Artificial or fictitious transactions

(1)

Subject to the provisions of this Act where a Board is of the opinion that any disposition is an artificial or fictitious transaction or where any transaction which reduces or would reduce the amount of any capital gains tax is artificial or fictitious the Board shall disregards such disposition and may direct that such adjustment should be made with respect to the liability of any person for the payment of capital gains tax as it considers appropriate so as to counteract the reduction of liability to capital gains tax effected or reduction which would otherwise be effected, by the transactions and any person connected with such transaction and any person concerned with such transaction shall be assessable accordingly.

(2)

Any person in respect of whom any direction is made under this section shall have a right of appeal in like manner as though for the purposes of this Act such direction were an assessment to capital gains tax.

(3)

For the purpose of this section

(a)

“disposition” includes any trust, grant, covenant, agreement or arrangement;

(b)

transaction between connected persons (within the meaning of section 23 of this section) shall be deemed to be artificial or fictitious if in the opinion of the Board those transactions have not been made on terms which might fairly have been expected to have been made by person engaged in the same or similar activities dealing with one another at arm's length; and

(c)

in relation to any direction made under this section the provision of this Act as to appeals against an assessment shall have effect as if such direction were an assessment.

22. Valuation: market value

(1)

For the purpose of computing capital gains, unless the context otherwise requires, “market value” in relation to any assets (whether chargeable asset or not) means the price which those assets might reasonable be expected to fetch on a sale in the open market.

(2)

In estimating the market value of any asset no reduction shall be made in the estimate on account of the estimate being made on the assumption that the whole of the asset is to be placed on the market at one and the same time.

(3)

In re-estimating the market value of any assets acquired, if the market value exceeds the consideration actually paid by the acquirer, the asset shall be deemed to have been acquired for the amount actually paid by the acquirer.

23. Transactions between connected persons.

(1)

This section shall apply where a person acquires an asset and the person making the disposal is connected with him.

(2)

Without prejudice to the generality of section 7 of this Act the person acquiring the asset and the person making the disposal shall be treated as parties to a transaction otherwise than by way of a bargain made at arm's length.

(3)

In a case where any asset mentioned in subsection (1) of this section is subject to any right or restriction enforceable by the person making the disposal, or by a person connected with him, then (the amount of the consideration for the acquisition being, in accordance with subsection (2) of this section, deemed to be equal to the market value of the asset) that market value shall be

(a)

what its market value would be if not subject to the right or restriction, minus

(b)

the market value of the right or restriction or the amount by which its extension would enhance the value of the asset its owner, whichever is the less: Provided that if the right or restriction of such a nature that its enforcement would or might effectively destroy or substantially impair the value of the asset without bringing any countervailing advantage either to the person making the disposal or a person connected with him or other right to acquire the asset or, in the case of immovable property, is a right to extinguish the asset in the hands of the person giving the consideration by forfeiture or merger or otherwise, that market value of the asset shall be determined, and the amount of the gain accruing on the disposal shall be computed, as if the right or restriction did not exist. This subsection shall apply to a right of forfeiture or other right exercisable on breach of a covenant contained in a lease of land or other property, and shall not apply to any right or restriction under a mortgage or other charge.

24. Meaning of “connected persons”

(1)

Any question whether a person is connected with another shall for the purpose of this Act he determined in accordance with this section (any provision that one person is connected with another being taken to mean that they are connected with one another).

(2)

A person is connected with an individual if that person is the individual's husband or wife, or is a relative, or the husband or wife of a relative, of the individual or of the individual's husband and wife.

(3)

A person in his capacity as trustee of a settlement is connected with any individual who in relation to the settlement is a settlor, and with any person who is connected with such an individual.

(4)

A person is connected to any person with whom he is in partnership, and with the husband or wife or relative of any individual with whom he is in partnership.

(a)

if the same person has control of both or a person has control of one and persons connected with him, or he and persons connected him, have control of the other; or

(b)

if a group of two or more persons has control of each company, and the groups either consists of the same persons or could be regarded as consisting of the same persons by treating (in one or more cases) a member of either group as replaced by a person with whom he is connected.

(6)

A company is connected with another person, if that person has control of it or if that person and persons connected with him together have control of it.

(7)

Any two or more persons acting together to secure or exercise control of a company shall be treated in relation to that company as connected with one another and with any person acting on the directions of any of them to secure or exercise control of the company.

(8)

In this section, “relative” means brother, sister, ancestors or lil1eal descendant.

25. Location of assets

For the purposes of this Act –

(a)

the situation of rights or interests (otherwise than by way of security) in or over immovable property is that of the immovable property;

(b)

subject to the following provisions of this subsection, the situation of rights or interests (otherwise than by way of security) in or over tangible movable property is that of the tangible movable property;

(c)

subject to the foregoing provisions of this section, a debt, secured or unsecured, is situated in Nigeria if and only if the creditor is resident in Nigeria;

(d)

shares or securities issued by any governmental, municipal, local or native authority, or by anybody created by such an authority are situated in the country of that authority or place where the authority is situated;

(e)

subject to paragraph (d) of this section, registered shares or securities are situated where they are registered and, if registered in more than one register, where the principal register is situated;

(f)

a ship or aircraft is situated in Nigeria if and only if the owner is then resident in Nigeria, and an interest or right in or over a ship or aircraft is situated in Nigeria if and only if the person entitled to the interest or right is resident in Nigeria;

(g)

the situation of Goodwill of a trade, business or professional asset is at the place where the trade, business or profession is carried on;

(h)

patents, trade-marks and designs are situated where they are registered, and if registered in more than one register, where each register is situated, and copyright, franchises, rights and licensed to use any copyright material, patent, trade-mark or design are situated in Nigeria if they, or any rights derived from them, are exercisable in Nigeria; and

(i)

a judgment debt is situated where the judgment is recorded.

26. Supplemental

(1)

No deduction shall be allowable in a computation under this Act more than once from any sum or from more than one sum.

(2)

Reference in this Act to sums taken into account as receipts or as expenditure in computing profits or gains or losses for the purposes of income tax shall include references to sums which would be so taken into account but for the face that any profits or gains of a trade, profession, employment or vocation are not chargeable to income tax or that losses are not allowable for those purposes.

(3)

In this Act references to income or profits charged or profits chargeable to tax include references to income or profits taxed or profits taxed or as the case may be taxable by deduction at source.

(4)

For the purposes of any computation under this Act, any necessary apportionment, shall be made of any expenditure and the method of apportionment adopted shall, subject to the express provisions of this Act, be such method as appears to the Board or on appeal to the Appeal Commissioners or the High Court of a State or of the Federal Capital Territory, Abuja to be just and reasonable.

Exemptions and reliefs

27. Exemptions for charities, etc.

(1)

Subject to subsection 2 of this section, a gain shall not be chargeable if it accrues to

(a)

an ecclesiastical, charitable or educational institution of a public character;

(b)

any statutory or registered friendly society;

(c)

any co.-operative society registered under the Cooperative Societies Law of any state; or

(d)

any trade union registered under the Trade Unions Act; in so far as the gains is not derived from any disposal of any assets acquired in connection with any trade or business carried on by the institution or society and the gain is applied purely for the institution or society as the case may be.

(2)

If any property to which subsection (l) of this section relates which is held on trust ceases to be subject to such trust

(a)

the trustees shall be treated as if they had disposed of,and immediately re-acquired, the property for a consideration equal to its market value, any gain on the disposal being treated as not accruing to the institution or society; and

(b)

if and so far as any of that property represents, directly or indirectly, the consideration for the disposal of assets by the trustees, any gain accruing on that disposal shall be treated as not having accrued to such institution or society and notwithstanding anything in this Act limiting the time for making assessment to capital gains tax chargeable by virtue of paragraph (b) of this subsection may be made at any time not more than three years after the end of the year of assessment in which the property ceases to be subject to such trusts.

28. Statutory bodies, etc.

(1)

There shall be exempt from capital gains tax any gains accruing to any Local Government Council.

(2)

Gains accruing to any of the bodies mentioned in this subsection shall be exempt from capital gains tax, that is to say

(a)

gains accruing to any company, being a purchasing authority established by or under any law in Nigeria, empowered to acquire any commodity in Nigeria for export from Nigeria; or

(b)

gains accruing to any corporation established by or under any law for the purpose of fostering the economic development of any party of Nigeria in so far as the gains are not derived from the disposal or any assets acquired by the corporation in connection with any trade or business carried on by it or from the disposal or any assets acquired on by the corporation in a trade or business carried on by some person or authority.

29. Retirement benefits Schemes.

(1)

A gain shall not be a chargeable gain

(a)

if accruing to a person from any disposal of investment held by him as part of any superannuation fund but so that where part only of fund is approved under section 20 of the Personal Income Tax Act the gain shall be exempt from being a chargeable gain to the same extent only as income derived from the assets would be exempt under that section; [Cap. P8.]

(b)

if accruing to a person from his disposal of investment held by him as part of any national provident fund or other retirement benefits schemes established under the provisions of any Act or enactment for employees throughout Nigeria, and such gain shall be exempt from tax under this Act and the Personal Income Tax Act.

[1993 No. 104.]

(2)

No chargeable gain shall accrue to any person on the disposal of a right to, or to any part of any sum payable out of any superannuation fund.

(3)

In this section, “superannuation fund” means a pension, provident or other retirement benefits fund, society or scheme approved by the Joint Tax Board under section 20(1)(f) of the Personal Income Tax Act.

30. Decorations

A gain shall not be chargeable gain if it accrues on the disposal by any person of a decoration, awarded for valour or gallant conduct which he acquires otherwise than for consideration in money or money's worth.

31. Stocks and shares, etc.

(1)

Gains accruing to a person from a disposal by him of Nigeria Government securities, stocks and shares shall not be chargeable gain under the Act.

(2)

In this section, “Nigeria government securities” include Nigeria treasury bonds, include Nigeria treasury bonds, savings certificates and premium bonds issued under the Savings Bonds and certificates Act;

32A. Exemption of tax on gains arising from take–over, etc.,

A person shall not be chargeable to tax under this Act, in respect of any gains arising from the acquisition of the share of a company either merged with, or taken over or absorbed by another company as a result of which the acquired company loses its identity as a limited liability company, provided that no cash payment is made in respect of the shares acquired.

[1993 No. 3]

32B. Tax not chargeable on Unit Trust’s proceeds reinvested

Gains accruing to unit holders of unit trust in respect of disposal of securities shall not be chargeable to tax provided the proceeds are re-invested.

[1993 No. 3]