Fatwa ID: 09320
Answered by Mufti Ateiq-ur Rehman
Question:
Salaam
Couple of zakat related questions.
1. Do you have to pay zakat on investments in shares?
2. Do you have to pay zakat on money/savings belonging to children who are not baligh?
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
Yes, zakat is due on shares, but how it is calculated depends on the intention behind owning them. If the shares were purchased with the intention of trading, meaning you buy and sell them like stock for profit, then they are treated like trade goods. In this case, you pay zakat on their full market value at your zakat date, at 2.5 percent.
If the shares were purchased for long term investment to earn dividends and not for resale, then the ruling differs. You do not necessarily pay zakat on the full market value. Rather, zakat is due on the zakatable assets of the company (such as cash, stock in trade, receivables), according to your shareholding percentage. In practice, many scholars allow one of two methods: either pay 2.5 percent on the current market value (which is simpler and safer), or calculate zakat only on the proportion of zakatable assets if reliable information is available. Dividends received are treated like cash savings and are added to your other wealth for zakat purposes.
In the Hanafi school, zakat is not obligatory on the wealth of a child who has not reached puberty. Zakat is a financial act of worship and requires legal responsibility, which only applies after bulugh. Therefore, the guardian is not required to pay zakat from the minor’s wealth according to the relied upon Hanafi position. However, once the child reaches puberty, zakat becomes obligatory if the wealth meets the nisab and other conditions.
Only Allah ﷻ knows best.
Written by Mufti Ateiq-ur Rehman
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
References:
الزَّكَاةُ وَاجِبَةٌ فِي عُرُوضِ التِّجَارَةِ كَائِنَةً مَا كَانَتْ إذَا بَلَغَتْ قِيمَتُهَا نِصَابًا مِنْ الْوَرِقِ وَالذَّهَبِ كَذَا فِي الْهِدَايَةِ
كتاب الفتاوى العالمكيرية = الفتاوى الهندية 1:179
وذهب الحنفية إلى أن الزكاة لا تجب في ماله، مع إيجابهم العشر في زرعه وثماره، وإيجاب صدقة الفطر عليه
كتاب فتاوى الشبكة الإسلامية 11:15790
(قَوْلُهُ عَقْلٌ وَبُلُوغٌ) فَلَا تَجِبُ عَلَى مَجْنُونٍ وَصَبِيٍّ لِأَنَّهَا عِبَادَةٌ مَحْضَةٌ وَلَيْسَا مُخَاطَبَيْنِ بِهَا، وَإِيجَابُ
النَّفَقَاتِ وَالْغَرَامَاتِ لِكَوْنِهَا مِنْ حُقُوقِ الْعِبَادِ وَالْعُشْرِ
رد المحتار ج٢ ص٢٥٨ دار الفكر بيروت
Zakat is not payable on the money owned by a minor child. It will be payable after one lunar year from the date of puberty. The puberty means that he becomes able to ejaculate. If this sign does not appear then he may be deemed to be pubert when he completes 15 lunar years from the date of his birth.
(Contemporary Fatwas, Mufti Taqi Uthmani, p189)
4.19.2 Stock valuation Q) What should be the basis of valuation of our stock for the purpose of Chapter 04 Zakat 239 Zakat. Should we calculate the value on the basis of our cost price or on the basis of the present market price
(Contemporary Fatwas, Mufti Taqi Uthmani, p239)