Lending by a father to his son for trade, with no right to any of the trade profit
Machine translationRead the Arabic original
Fatwa No. ( 20159 )
Q: Praise be to Allah alone, and blessings and peace be upon the one after whom there is no prophet. After that: The Permanent Committee for Scholarly Research and Ifta has reviewed what was sent to His Eminence the Grand Mufti from the Director of the Scientific Institute in the Rajal Al-Ma' Governorate, and its Da'wah representative: Husayn ibn Ibrahim ibn Muhammad Ya'qub, with number
( 9\1 ) and date 2\1\1419 AH, accompanied by the inquiry submitted by Ibrahim ibn Ahmad Tawil, and referred to the Committee by the General Secretariat of the Council of Senior Scholars with number ( 392 ) and date 10\1\1419 AH. The text of his inquiry is as follows: I have a sum of seventy thousand riyals ( 70.000 ). I asked my three sons to have one of them take the amount to trade in it, on the condition that he preserve the capital, which is the seventy thousand riyals, and return it to me when I ask for it. One of the three sons accepted because he is free to do so, and his two brothers gave him permission and were pleased with it in their hearts and in fact. Indeed, my eldest son took the money and traded in it, and Allah granted him good provision. As a kindness from my son, he gives me some money at intermittent intervals until the amount I received from my son reached eleven thousand riyals ( 11.000 ) over eight years, which is from his profits in this amount. My question is: Is it permissible for me to take from my son this amount of eleven thousand riyals, which is from his profits, in addition to the capital I gave him to work with for himself and his profits? And upon my death, do the heirs have a right to the profits, or do they receive only the capital from their brother?
After the Committee studied the inquiry, it answered that what appears is that this transaction is called by the jurists: ( Lending ). If the owner of the money says: ( Take
this money and trade with it, and all the profit is for you and the capital is for me ), it is a loan, and the owner of the money has no right to its profit. Accordingly, all the profits your son obtains are his right, and you have only your capital, without increase or decrease, whether you recover it yourself or your heirs after you. However, if your son gives you from the profits as a gift to you, and not for his benefit from the money or for delaying its repayment, or gives you what was customary for him to give you before the loan, there is no harm in taking it, and there is no objection to it. But if you ask him to give you from the profit for his benefit from the money or for the long duration of the capital remaining with him, then that is forbidden and not permissible for you to take; because it is a loan that brought benefit, and every loan that brings benefit is riba. There is no objection to you giving your son this money as a mudarabah (profit-sharing partnership), and your son has a known undivided share of the profit, such as a quarter, a half, three quarters, or the like, and the remainder of the profit after the share stipulated for your son is permissible for you by Shari'ah, and that is called a mudarabah partnership. And success is from Allah, and may Allah send blessings and peace upon our Prophet Muhammad, his family, and his Companions.
Q: Praise be to Allah alone, and blessings and peace be upon the one after whom there is no prophet. After that: The Permanent Committee for Scholarly Research and Ifta has reviewed what was sent to His Eminence the Grand Mufti from the Director of the Scientific Institute in the Rajal Al-Ma' Governorate, and its Da'wah representative: Husayn ibn Ibrahim ibn Muhammad Ya'qub, with number
( 9\1 ) and date 2\1\1419 AH, accompanied by the inquiry submitted by Ibrahim ibn Ahmad Tawil, and referred to the Committee by the General Secretariat of the Council of Senior Scholars with number ( 392 ) and date 10\1\1419 AH. The text of his inquiry is as follows: I have a sum of seventy thousand riyals ( 70.000 ). I asked my three sons to have one of them take the amount to trade in it, on the condition that he preserve the capital, which is the seventy thousand riyals, and return it to me when I ask for it. One of the three sons accepted because he is free to do so, and his two brothers gave him permission and were pleased with it in their hearts and in fact. Indeed, my eldest son took the money and traded in it, and Allah granted him good provision. As a kindness from my son, he gives me some money at intermittent intervals until the amount I received from my son reached eleven thousand riyals ( 11.000 ) over eight years, which is from his profits in this amount. My question is: Is it permissible for me to take from my son this amount of eleven thousand riyals, which is from his profits, in addition to the capital I gave him to work with for himself and his profits? And upon my death, do the heirs have a right to the profits, or do they receive only the capital from their brother?
After the Committee studied the inquiry, it answered that what appears is that this transaction is called by the jurists: ( Lending ). If the owner of the money says: ( Take
this money and trade with it, and all the profit is for you and the capital is for me ), it is a loan, and the owner of the money has no right to its profit. Accordingly, all the profits your son obtains are his right, and you have only your capital, without increase or decrease, whether you recover it yourself or your heirs after you. However, if your son gives you from the profits as a gift to you, and not for his benefit from the money or for delaying its repayment, or gives you what was customary for him to give you before the loan, there is no harm in taking it, and there is no objection to it. But if you ask him to give you from the profit for his benefit from the money or for the long duration of the capital remaining with him, then that is forbidden and not permissible for you to take; because it is a loan that brought benefit, and every loan that brings benefit is riba. There is no objection to you giving your son this money as a mudarabah (profit-sharing partnership), and your son has a known undivided share of the profit, such as a quarter, a half, three quarters, or the like, and the remainder of the profit after the share stipulated for your son is permissible for you by Shari'ah, and that is called a mudarabah partnership. And success is from Allah, and may Allah send blessings and peace upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.