Question: Are trusts (where the legal and beneficial ownership of an asset are split) recognised in Islam? e.g. a house is in my name, but I’m holding it on trust for my brother?
Answer:
لجواب حامدا ومصليا ومسلما ومنه الصدق والصواب
The split of legal and beneficial ownership does find some validity in Islamic jurisprudence. A waqf is an example of this according to the understanding of waqf of Imam Abu Hanifa and Imam Malik. Equally, a bequest of usufruct in favour of a third party grants beneficial ownership of the usufruct, whilst ownership of the corpus is retained by the legator. Sometimes, beneficial ownership in the UK can amount to actual ownership in Islamic law.
And Allah knows best.
Mufti Mohammed Zubair Butt