Section 36 Nigeria Tax Act 2025

Section 36 of the Nigeria Tax Act 2025 is about Disposal of assets, provisions as to considerations. It provides as follows:

(1) Subject to the provisions of this Act, the acquisition and disposal of an asset by a person shall be deemed to be for a consideration equal to the market value of the asset where the person acquires the asset –
(a) otherwise than by way of a bargain made at arm’s length;

(b) wholly or partly for a consideration that cannot be valued;
(c) as trustee for creditors of the person making the disposal; or

(d) upon devolution on death as a personal representative or legatee of a deceased.

(2) Where a person disposes of an asset by way of gift, other than asset acquired or disposed by devolution on death, the person acquiring the asset shall, as it relates to the interest taken by the person, be deemed to have acquired the asset –

(a) for a consideration equal to the amount for which the asset was last disposed of by way of a bargain made at arm’s length; or
(b) where the amount last disposed of by way of bargain made at arm’s length cannot be ascertained, for a consideration equal to the market value of the asset on the date of that disposal.

(3) Where an asset is held by a person as a nominee or trustee for –
(a) another person absolutely entitled,
(b) an infant or a person with disability, or
(c) two or more persons, the provisions of this Part 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 referred to in this subsection.

(4) Any acquisition of the asset referred to in subsection (3) by the nominee or trustee or the disposal of the assets to the nominee or trustee shall be disregarded.

(5) The conveyance or transfer by way of security of an asset or of an 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 as involving any acquisition or disposal of the asset.

(6) Any dealing with an asset by a person who has a security interest in it or who has the benefit of a charge against it or an encumbrance against it in order to enforce or give effect to those rights shall be deemed to have been made by that person in his capacity as that person’s nominee.

(7) 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 thereby assumed by the person acquiring the asset shall form part of the consideration for the acquisition and disposal in addition to any other consideration.

(8) Where an asset is acquired by a creditor in satisfaction of his debt or part of it –
(a) the asset shall not be treated as disposed of by the debtor or acquired by the creditor for a consideration greater than its market value at the time of the creditor’s acquisition of it; and
(b) chargeable gain accruing to the creditor on disposal of the asset shall not exceed the chargeable gain which would have accrued if he had acquired the property for a consideration equal to the amount of the debt or that part.

(9) In this section –
“legatee” includes any person taking under a testamentary disposition or on an intestacy or partial intestacy, whether he is taken as a beneficiary or trustee, and a gift made in contemplation or condition of death shall be treated as a testamentary disposition and not as a gift;
“personal representatives” means –
(a) the executor or the representative, or administrator for the time being of a deceased person under any law in force in Nigeria; or
(b) persons who, under the law of another country, have functions corresponding to personal representatives as defined under paragraph (a).

[/membership]