Economy
What is Capital Gains Taxation and How to Optimize it?
If you have ever traded any securities on the capital markets, chances are that you have paid capital gains taxes before, provided the country of your residence levies such taxes.
Capital gains taxes are levied on the profit generated by buying and selling a particular asset or financial security.
For example, if an investor buys 10 Apple stock for $200 per share and then sells the entire investment for $220 per share, the taxable profit is $200.
Taxes on FX gains are levied at different rates, depending on the length of the holding period of the investment. Long-term capital gains taxes are levied after at least 12 months of holding an asset, while anything less is treated as a short-term capital gain.
In order to better understand how capital gains taxes work and how to optimize your strategies against them, we can look at several examples below.
Example 1 – Long-term capital gains tax
Long-term capital gains taxes in the United States are levied at a rate of 0%, 15%, or 20%, based on income levels and filing status.
Typically, long-term capital gains taxes are levied on asset sales after at least 12 months from purchase. Therefore, if an investor sells an asset 2 years after purchase, the profit will be treated as a long-term capital gain and taxed accordingly.
In other countries, long-term capital gains may have a flat tax rate. For instance, France upholds a long-term capital gains tax of 30%, regardless of the type of instrument.
Example 2 – Short-term capital gains tax
If we look at an example of short-term capital gains taxation, we can see that short-term gains are much easier in terms of tax handling, particularly in the United States, where short-term capital gains are taxed at the ordinary federal and state income tax rates.
For example, if an investor buys $100,000 worth of shares and sells them at a 10% profit in 6 months, the $10,000 difference would be taxable at a rate of 22%, assuming the investor has no other sources of income.
In general, the federal taxes levied on short-term capital gains range from 10% to 37%, with an additional state tax based on place of residence.
Are capital gains taxes universal?
Similarly to any other type of tax levied by governments, capital gains taxes can differ considerably based on the jurisdiction where you reside.
For example, short-term capital gains taxes in the United States are charged at the ordinary income levels, which means that the taxes on short-term capital gains are levied at rates between 10% on the lower end and 37% on the higher end.
On the other hand, a number of countries do not charge capital gains taxes at all. Some such jurisdictions include: Switzerland, Singapore, the UAE, Monaco, Malaysia, Belgium, New Zealand, and more.
In most cases capital gains taxes are levied at income tax levels, while in some cases, they are entirely separate and taxed at a separate, but smaller, rate.
Optimizing your capital gains tax
A key difference between capital gains and other taxes is that capital gains taxes can be optimized, leading to a smaller tax burden overall.
There are several ways of optimizing your capital gains taxes, especially if you reside in the United States and have a SSN, as a number of tax-advantaged investment accounts are available to US residents and citizens, such as: The 401(k), Roth IRAs and Regular IRAs.
In the United Kingdom, you can choose an Individual Savings Account, or ISA. These accounts allow you to close your investments tax-deferred, meaning you do not have to pay capital gains taxes when using them.
Another strategy you can use is tax-loss harvesting, which is done by selling losing investments to offset taxable capital gains. If losses exceed gains, many jurisdictions allow to carry forward excess losses to future years. However, it is also worth noting that tax-loss harvesting can only be done up to $3,000 in the United States.
Conclusion
Capital gains taxes are levied on the profit generated by buying and selling financial securities and other assets.
The rates of capital gains tax differ considerably between jurisdictions and some countries do not levy capital gains taxes at all.
In general, there are two types of capital gains taxes – Short-term and longterm. In most cases, short-term capital gains are taxed as ordinary income, while long-term capital gains taxes are treated as a distinct subcategory of income tax.
For those seeking to optimize their capital gains taxation to avoid overpaying, they can use strategies, such as tax-loss harvesting up to a certain point, or invest and trade using a IRA or other tax-deferred investment/savings account.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange further appreciated by 0.23 per cent on Thursday, April 23, with the Unlisted Security Index (NSI) adding 8.99 points to close at 3,969.96 points against the previous day’s 3,968 points.
The rise in the share price of Central Securities Clearing System (CSCS) Plc by N2.86 to N69.34 per unit from N66.48 per unit raised the market capitalisation of the NASD bourse by N5.38 billion to N2.380 trillion from N2.375 trillion.
Yesterday, there were two price losers, led by Food Concepts Plc, which lost 29 Kobo to sell at N2.65 per share versus N2.94 per share, while UBN Property Plc dipped by 22 Kobo to N2.03 per unit from N2.25 per unit.
During the session, the volume of securities traded declined by 97.9 per cent to 451,522 units from 21.5 million units on Wednesday, the value of securities depreciated by 52.32 per cent to N23.6 million from N49.5 million, and the number of deals depreciated by 3.6 per cent to 27 deals from 28 deals.
At the close of business, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.5 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
By Adedapo Adesanya
Fresh foreign exchange (forex) demand pressure saw the Naira depreciate against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 22, by N5.46 or 0.4 per cent to trade at N1,353.91/$1 compared with the preceding day’s value of N1,348.45/$1.
It was the same outcome for the local currency in the official market after it depreciated against the Pound Sterling by N4.13 to close at N1,825.88/£1, in contrast to the preceding session’s N1,821.75/£1, and against the Euro, it dropped 72 Kobo to finish at N1,582.72/€1 versus N1,582.00/€1.
But the Nigerian Naira appreciated against the US Dollar at the GTBank FX desk by N2 during the session to quote at N1,361/$1 compared with Wednesday’s closing price of N1,361/$1, and at the parallel market, it closed flat at N1,375/$1.
FX Pressure came as data showed that NFEM interbank turnover was N28.117 million, lower than the N66.084 million recorded the previous day.
Concerns over liquidity pressures, policy transparency, and confidence in Nigeria’s FX market continue to grip the market while the country’s foreign reserve declines further, even as the Central Bank of Nigeria (CBN) recently said that the recent decline in Nigeria’s external reserves should not be a cause for concern.
Global developments also played a significant role, as rising geopolitical tensions boosted demand for the US Dollar, further weakening emerging market currencies, including the Naira.
As for the cryptocurrency market, there was a mixed outcome as traders reacted to rising geopolitical tensions from the Iran war and fresh inflation data from Japan.
Japanese inflation ticked higher in March, stoking expectations that the Bank of Japan may soon signal rate hikes, which could strengthen the yen and unsettle global risk assets.
The Iran conflict has disrupted oil flows through the Strait of Hormuz, raising energy costs and inflation risks worldwide and potentially complicating efforts by the Federal Reserve to cut interest rates.
Ethereum (ETH) declined by 1.8 per cent to $2,316.53, Bitcoin (BTC) lost 0.6 per cent to sell at $77,935.53, Solana (SOL) fell by 0.5 per cent to $85.67, and Binance Coin (BNB) dropped 0.4 per cent to sell for $634.85.
However, Dogecoin (DOGE) appreciated by 1.4 per cent to $0.0976, Ripple (XRP) grew by 0.7 per cent to $1.43, Cardano (ADA) expanded by 0.6 per cent to $0.2493, and TRON (TRX) improved by 0.2 per cent to $0.3279, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Aduragbemi Omiyale
The resilience shown by Nigerian Breweries Plc in the 2025 fiscal year, despite a volatile macroeconomic environment, which consumed several businesses, has not got without notice.
Shareholders of the brewery giant applauded the board and management for the strong recovery and improved profitability recorded in the year.
At the company’s 80th Annual General Meeting (AGM) on Wednesday, April 22, 2026, in Lagos, they attributed these achievements to disciplined cost management and a significant reduction in finance expenses.
“We are proud of how the company has withstood the ups and downs of a challenging environment. The return to profitability and the reversal of the negative cash position recorded in the previous two financial years are commendable,” a member of the Noble Shareholders Association, Mr Owolabi Opeyemi, said at the gathering.
Also, the immediate past Secretary of the Independent Shareholders Association of Nigeria (ISAN), Mr Eke Emmanuel, noted that the company’s resilience reflects strong leadership and a sound strategic direction.
“It is good news that we have been here for 80 years. There is no reason why we will not be here for the next 80 years with what we have achieved. To return to this level of profitability and cash position shows the Board has done an enormous amount of work,” he said.
Addressing investors at the AGM, the board chairman, Mrs Juliet Anammah, expressed confidence that the company is firmly on a recovery path following the net losses recorded in the past two years due to macroeconomic pressures and fiscal reforms.
She thanked shareholders for their continued support and reaffirmed that the company will build on its 2025 performance as it accelerates growth ambitions.
“We have a solid foundation built over eight decades, anchored on a strong portfolio of brands, an extensive nationwide sales and supply chain network, ongoing digital transformation, and most importantly, our people. These strengths remain critical to sustaining our leadership position,” the former chief executive of Jumia Nigeria said.
Ms Anammah also addressed the company’s dividend position, noting that the decision not to declare a dividend reflects the need to rebuild retained earnings impacted by prior macroeconomic shocks, particularly foreign exchange-related losses.
“We recognise the importance of dividend payments to our shareholders and sincerely appreciate your continued understanding. While we are not declaring a dividend at this time due to negative retained earnings, we are working diligently to restore the company’s financial position and return to dividend payments as soon as it is sustainable to do so,” she added.
She further noted that the board remains vigilant to external risks, including the Middle East crisis and broader macroeconomic challenges, which may impact the pace of improvement in the 2026 financial year.
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