The Ruling and Method of Zakah on Money Lent to Others
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Question:
A man had a car, which he sold for twenty-five thousand riyals. Before a full lunar year had passed with him in possession of the amount, his brother borrowed eighteen thousand from him. The man took the amount, and nothing remained with him except three thousand. Is he required to pay zakah on the entire amount, including what his brother took, when the year arrives? Or what is the ruling?
Answer:
If he has an amount of money, twenty-five thousand or less or more, and then he lends some of it to his brother before the year is completed, this is a shortcoming on his part. As for the remainder that is for himself, if the year passes over it, the remainder that is for himself, in every thousand of the twenty-five thousand, a quarter of a tenth is due. As for what the borrower took as a loan, this requires clarification. If the other party is a guardian who is able to return the money, then this exists in the case where the lender is with the one who returns the money, because it is like a trust with his brother, because he is free to return it whenever he wishes. However, if the one who took it is in a state of financial hardship, such that he spent it on a trust or in marriage and he is in a state of hardship, then there is no zakah on the lender until he receives the money from the one in hardship and possesses it for a year. If he receives it, he starts a new year with it. If he pays zakah on it for one past year and then starts a new year with it thereafter, there is no harm. Yes. If the borrower is in a state of financial hardship and cannot return the money, or if the one who owes it has a void debt after taking the money, and the void debt prevented him from returning the money, and he did not return the money, then the owner of the money who lent it, or who gave it as a gift, and the other party acknowledged it, or it is a past debt, is not obligated to pay zakah until he receives it, according to the most correct opinion of the scholars. If he receives it, he starts a new year with it. If he pays zakah on it for one past year and then starts a new year with it thereafter, there is no harm. Yes.
A man had a car, which he sold for twenty-five thousand riyals. Before a full lunar year had passed with him in possession of the amount, his brother borrowed eighteen thousand from him. The man took the amount, and nothing remained with him except three thousand. Is he required to pay zakah on the entire amount, including what his brother took, when the year arrives? Or what is the ruling?
Answer:
If he has an amount of money, twenty-five thousand or less or more, and then he lends some of it to his brother before the year is completed, this is a shortcoming on his part. As for the remainder that is for himself, if the year passes over it, the remainder that is for himself, in every thousand of the twenty-five thousand, a quarter of a tenth is due. As for what the borrower took as a loan, this requires clarification. If the other party is a guardian who is able to return the money, then this exists in the case where the lender is with the one who returns the money, because it is like a trust with his brother, because he is free to return it whenever he wishes. However, if the one who took it is in a state of financial hardship, such that he spent it on a trust or in marriage and he is in a state of hardship, then there is no zakah on the lender until he receives the money from the one in hardship and possesses it for a year. If he receives it, he starts a new year with it. If he pays zakah on it for one past year and then starts a new year with it thereafter, there is no harm. Yes. If the borrower is in a state of financial hardship and cannot return the money, or if the one who owes it has a void debt after taking the money, and the void debt prevented him from returning the money, and he did not return the money, then the owner of the money who lent it, or who gave it as a gift, and the other party acknowledged it, or it is a past debt, is not obligated to pay zakah until he receives it, according to the most correct opinion of the scholars. If he receives it, he starts a new year with it. If he pays zakah on it for one past year and then starts a new year with it thereafter, there is no harm. Yes.
Source
قناة «فضيلة الشيخ ابن باز Alsheikh Binbaz»، 088 حكم وكيفية زكاة المال المقرض للغير للإمام ابن باز — youtube.com
The Arabic text is a machine transcription of the audio recording.