Section 63

(1) Where under the provisions of the Investments and Securities
Collective
Investment Act, a mutual fund is established for the purpose of providing facilities for the
Scheme participation of the public, as beneficiaries under a trust, in profits or income
Act No. 2, arising from acquisition, holding, management or disposal of securities or any
other property, chapter two of this Act shall, in respect of the income arising to
the trustees of a collective investment, have effect as if the –
(a) trustees were a company whose business consists mainly in the making
of investments and the principal part of whose income is derived from it;
(b) rights of the unit holders were shares in the company; and
(c) income accruing to the trustees as is available for payment to the unit
holders were dividends on such shar es, and reference to a company in this
Act shall include a collective investment scheme.
(2) For the purpose of section 27 of this Act, the profits of an authorised
collective investment scheme, on which tax, may be imposed, shall be
ascertained by taking the income accruing to the trustees from all the
investments of the scheme and deducting there from sums disbursed as
management expenses, including remuneration for the managers.
(3) Where the trustees of a scheme receive a payment on which the
scheme suffers tax by deduction, not being franked investment income, the tax
Nigeria Tax Act, 2025 2025 No. 7 A 431
deducted shall constitute an advance payment of income tax and shall be set-
off against income tax assessment for that year of assessment in ascertaining
the tax payable by the mutual fund or scheme.
(4) The profit accruing to the trustees of a collective investment that is
available for payment to unit holders or for investment shall be deemed to be
dividends paid or payable by the trustees to the unit holders in proportion to
their rights, and shall be taxed in the hands of the unit holders.
(5) In this section –
"authorised collective investment" means a scheme that is authorised Act No. 2,
by the Securities and Exchange Commission under the Investment and 2025
Securities Act to carry on the business of dealing in a mutual fund scheme
or collective investment scheme;
"collective investment scheme" means any arrangement made for the
purpose of providing facilities for the participation of the public as
beneficiaries under a trust in profits or income arising from the acquisition,
holding, management or disposal of securities or any other property;
"scheme" means authorised collective investment;
trustee" under a collective investment scheme means the person in whom
the property for the time being subject to any trust created under the scheme
is or may be invested in accordance with the terms of the trust; and
"unit holder" means any investor, beneficiary or person who acquired
units in a scheme and who is entitled to a share of the investments subject to
the trusts of a scheme.