How treating trust gains as ordinary income spells higher taxes for Nigerian families

Trusts and estate structures in Nigeria now face higher tax exposure, with trust income taxed as ordinary income at up to 25 percent, alongside expanded disclosure requirements that subject trustees to closer oversight.

Capital gains earned within trust structures are no longer taxed separately at 10 percent but are treated as ordinary income, increasing liabilities for families and corporate trustees who use trusts to hold assets and transfer wealth.

The shift means gains within trusts are no longer shielded by the 10 percent capital gains rate. According to Kelechi Ibe, co-founder of Taxstream and a former KPMG tax adviser, they are now treated as ordinary income and could be taxed at marginal rates of up to 25 percent.