Zakah on Shares Held in a Portfolio
Machine translationRead the Arabic original
Question:
And may Allah bless you. Another questioner says: Is it obligatory to pay zakah on shares held in an external portfolio? Knowing that these shares have not reached their purchase price, and there is a loss on them that may reach more than fifty percent. And when liquidity is available throughout the year, I buy these shares to do what is called price adjustment for the share. So is there zakah on them, may Allah preserve you? Or do joint-stock companies perform zakah on behalf of the shareholders? And may Allah reward you with good.
Answer:
If you know that the company pays zakah on behalf of the shareholders, that is sufficient. But if the company does not do that, zakah is obligatory on the owners of the shares. These shares do not fall outside of two types. The first type is for investment, because you seek from them profits, the yield, for fixed shares, called fixed shares that have a yield. And you purify what reaches you of its yield, if it reaches the nisab and a lunar year has passed over it, you purify what you obtain from its yield. It is fixed, you did not intend to sell it, but you intend it for investment and production. As for the second type, it is the shares intended for selling, buying, and trading. These are merchandise, so they have the ruling of merchandise. You appraise them at their value at the end of the lunar year and purify them. Yes.
The presenter:
May Allah reward you.
And may Allah bless you. Another questioner says: Is it obligatory to pay zakah on shares held in an external portfolio? Knowing that these shares have not reached their purchase price, and there is a loss on them that may reach more than fifty percent. And when liquidity is available throughout the year, I buy these shares to do what is called price adjustment for the share. So is there zakah on them, may Allah preserve you? Or do joint-stock companies perform zakah on behalf of the shareholders? And may Allah reward you with good.
Answer:
If you know that the company pays zakah on behalf of the shareholders, that is sufficient. But if the company does not do that, zakah is obligatory on the owners of the shares. These shares do not fall outside of two types. The first type is for investment, because you seek from them profits, the yield, for fixed shares, called fixed shares that have a yield. And you purify what reaches you of its yield, if it reaches the nisab and a lunar year has passed over it, you purify what you obtain from its yield. It is fixed, you did not intend to sell it, but you intend it for investment and production. As for the second type, it is the shares intended for selling, buying, and trading. These are merchandise, so they have the ruling of merchandise. You appraise them at their value at the end of the lunar year and purify them. Yes.
The presenter:
May Allah reward you.
Source
نور على الدرب - الفوزان - 03/221 — archive.org (2:01)
The Arabic text is a machine transcription of the audio recording.