Fatwa ID: 06561

Answered by: Maulana Burhaan Rahman

Question:

Is zakat due on gold jewellery that is in a pawn shop? 

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

According to the Cambridge definition, a pawn shop is, “a business where you may either leave your belongings to borrow money or buy items that others have left there and are now for sale”.

So whether there’s money or jewellery given by the pawnbroker to the customer exchanging the item, both are forms of zakatable items.

The basic principle is that everything that is prepared for sale is subject to zakaah, and things that are used in the shop are not subject to zakaah. So unless these things have been prepared for sale, in which case zakaah is due on them.

Our beloved prophet (SAW) has mentioned:

ليْسَ عَلَى الْمُسْلِمِ فِي عَبْدِهِ، وَلَا فَرَسِهِ، صَدَقَةٌ

No Sadaqa is due from a Muslim on his slave or his horse. [Muslim Hadeeth no. 982]

Imam Nawawi gives an explanation to this Hadeeth saying:

هَذَا الْحَدِيثُ أَصْلٌ فِي أَنَّ أَمْوَالَ الْقِنْيَةِ لَا زَكَاةَ فِيهَا

This hadith refers to “belongings” whereby there is no zakaah on it.

The jewellery in the pawn shop is used for trade and so money used in the pawn shop will be the same as jewellery used in the pawn so zakaah must be given on the jewellery (2.5%).

Only Allah knows best.

Written by Maulana Burhaan Rahman

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham