Q: If an individual lends £2,000 to his relative on the basis of qarḍ ḥasana (gratuitous loan) and the £2,000 is still outstanding. How should the lender treat the outstanding £2,000 for the purposes of zakāh? الجواب حامدًا و مصليًا و منه الصدق و الصواب A: A personal loan is categorized as a ‘strong debt’.[1] […]
Read more...Category: Zakat Fatawa
What is the distinguishing difference between a trust and waqf?
Q: What is the distinguishing difference between a trust and waqf? الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب A: The fundamental difference between the forms of trusts discussed in the document on trusts and a valid waqf is that in the latter property is taken out of one’s ownership and passed in to the ownership […]
Read more...Do I still have to pay zakah on my frozen pension fund?
Q: Do I still have to pay zakāh on my frozen pension fund? I have a pension which is now frozen where I have selected the funds. The pension is invested in shares. Both myself and my employer had contributed to the pension. The pension has made a profit. Can you please confirm the following: […]
Read more...Is zakah payable on the value of on account payments for a person who has an Islamic Home Purchase Plans?
Q: Is zakāh payable on the value of on account payments for a person who has an Islamic Home Purchase Plans? الجواب حامدًا و مصليًا و منه الصدق و الصواب A: Ownership of the on account payments, both under the Ijarah home purchase plan and the Diminishing Musharakah home purchase plan, remains vested in the […]
Read more...For zakat purposes, how might we interpret ‘fi sabeelillah’ in the modern context?
Q: How might we interpret fi sabeelillah in the modern context? Could this include campaigning or advocacy activities – for example, raising awareness about Islamic teachings on poverty issues, dispelling misperceptions about Islam, speaking out on international justice issues etc. الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب A: Whilst the literal meaning of fi sabilillah […]
Read more...How can I subtract oustanding debts from my zakatable assets when the exact amount is unknown?
Q: I would like to find out what I should do in a situation where in I owe money to a few organisations but I don’t know how much as I owe this money was due years ago, do I take a rough calculation and subtract it from the nisab? الجواب حامدا ومصليا ومسلما ومنه […]
Read more...Is the debtor considered poor, and thus eligible to Zakāt funds?
Q: Is the debtor considered poor, and thus eligible to Zakāt funds? الجواب حامدا ومصليا ومنه الصدق والصواب A: If the individual’s non-essential items do not cover the qualifying debts or do not reach the nisāb after covering qualifying debts then that person is considered poor and is eligible to receive zakāt. It […]
Read more...Q: Is the responsibility of Zakat a strictly individual responsibility or can it be joint say in the case of husbands and wives?
Q: Is the responsibility of Zakat a strictly individual responsibility or can it be joint say in the case of husbands and wives? الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب A: Zakat is strictly a personal obligation. Even in jointly owned wealth the obligation of zakat remains personal. Thus, if a husband and […]
Read more...What is the Shari’ah position with regards to zakah on Diminishing Musharaka home purchase plans?
Q: What is the Shari’ah position with regards to zakāh on Diminishing Musharaka home purchase plans? الجواب حامدًا و مصليًا و منه الصدق و الصواب A: Under the Diminishing Musharakah home purchase plan, the client again incurs a debt only to the extent of the outstanding monthly rental payments subsequent to his use of the […]
Read more...Why does one need to pay Zakat on a pension plan if one does not get access till later?
Q: I have recently setup a SI pension plan account where I can manage the investment but the principal and the gains are not available to me till the age of 55. Is the investment value still zakatable in the years leading up to age 55? الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب A: […]
Read more...Do I have to pay zakah on a loan that won’t be repaid to me?
Q: Do I have to pay zakāh on a loan that won’t be repaid to me? If a lender has lost all hope of recovering his loan how should he treat the outstanding amount for the purposes of zakāh? الجواب حامدًا و مصليًا و منه الصدق و الصواب A: If a lender has lost all […]
Read more...Zakat on a Murabaha deal – Example
Context 1) Client will purchase equipment from financier once financier has purchased and assumed the risk thereof. 2) Client will purchase goods on the basis of a MURABAHA sale with the purchase price being paid as per below. 3) The selling price of the equipment sold by the financier to the client will be cost […]
Read more...