CAPITAL TRANSFER TAX ACT
Act · Finance
An Act imposes tax on transfers of capital assets, such as gifts and inheritances, above a certain value. It targets individuals making large bequests and estates of deceased persons. This seeks to prevent tax avoidance and redistribute wealth.
CAPITAL TRANSFER TAX ACT
What Is This Policy?
An Act imposing tax on the transfer of capital assets — including gifts and inheritances — above a prescribed value, taxing the gratuitous transfer of wealth from one person to another.
Who Does It Target?
Persons making large gifts or bequests Estates of deceased persons subject to estate tax FIRS as the collecting authority Legal practitioners handling estate administration
What Does It Aim to Achieve?
Prevent avoidance of income tax through gifts and inheritances by taxing gratuitous transfers of capital assets, and redistribute wealth through taxation of large bequests.
Key Features
Transfer Tax: Imposes tax on transfers of property by gift or on death above threshold values. Exemptions: Prescribed categories of transfers (small gifts, charitable donations) are exempt. Valuation: Assets are valued at market value at the time of transfer for tax purposes. FIRS Administration: FIRS assesses and collects capital transfer tax.
Current Status
Rollout Stage: Limited application — the Act exists but is rarely actively enforced in Nigeria Coverage: Nationwide gratuitous capital transfers Beneficiaries: Government revenue; wealth distribution Funding: Revenue measure
How to Access
Executors of estates: file capital transfer tax returns where applicable Gifts above threshold: declare to FIRS Seek professional tax advice on large transfers Application method: File capital transfer tax returns with FIRS at https://www.firs.gov.ng
Important Terms
Capital transfer tax is distinct from Capital Gains Tax (which taxes gains on disposal) The Act's provisions overlap in some respects with estate planning considerations Professional tax advice is recommended for large gift and estate transfers
Official Resources
Website: https://www.firs.gov.ng Contact: Federal Inland Revenue Service (FIRS)
Legal Framework
Enacted under the legislative powers of the National Assembly as the Capital Transfer Tax Act (Cap C4 LFN 2004). Operates alongside the Finance Acts, the Companies Income Tax Act (CITA), the Personal Income Tax Act (PITA), and the Federal Inland Revenue Service (Establishment) Act. Tax administration is conducted by FIRS, with the Stamp Duties Act providing complementary coverage for instruments of transfer.