Q: Do I have to pay zakāh on shares held for me by a nominee on trust?
For e.g. I purchase shares in my own name via TD Waterhouse who hold legal title on a nominee basis. This means they are shown on the company register as the legal owners of the shares. However they are holding them on trust on my behalf, and are obliged to do with them as I instruct.
الجواب حامدًا و مصليًا و منه الصدق و الصواب
A: This is a nominee structure with shares held by TD Waterhouse on your behalf. TD Waterhouse is merely an agent, while proprietorship is vested in you. As TD Waterhouse is bound by your instructions, you also enjoy possession through the medium of TD Waterhouse. Thus you are liable for zakāh.
For a detailed breakdown of The Treatment of Trusts for Zakāh purposes, please visit the Research Paper section at www.alqalam.org.uk