Zakat is Fardh (compulsory) upon every sane adult Muslim (male and female) who possesses wealth or assets equal to or above a certain financial threshold (known as the Nisab) for one lunar year.

The Nisab is 87.48g gold if a person only possesses gold or 612.36g of silver if one has only silver. If a person has various zakatable assets then the Nisab will be the value of 612.36g of silver (which equates to approximately £386 as of Feb 2021).

Zakat is due on • Gold & silver (ornaments or jewellery) • Cash held at home or in bank accounts • Pensions • Property owned for investment purposes • Stocks & shares owned directly or through investment funds • Money lent to others • Business stock in trade & merchandise • Agricultural produce

The Qur’an specifies eight categories for the distribution of Zakat: “Indeed, Zakat expenditures are only for [1] the poor and [2] the needy, and [3] to those who work on [administering] it, and [4] for bringing hearts together, and [5] to [free] those in bondage, and [6] for those in debt, and [7] for the cause of God, and [8] for the stranded traveller. [This is] an obligation from God. God is All-Knowing, All-Wise.”

(Qur’an, Chapter 9, Verse 60)

A person’s zakat day is one lunar year from the day when one first possesses the niṣab of zakat, provided that one is mature and sane and he retains some amount of wealth throughout this period. Thereafter, this same date every year will remain as a person’s zakat day provided that some wealth remains throughout the year.

If a person cannot remember his original zakat day then he should try his best to estimate when this date was. If one is not even able to estimate when this date was then one should fix a date in the lunar year and use this as his zakat day.

When a person reaches his zakat day and he possesses wealth equal or exceeding the zakat niṣab, he will give zakat on whatever zakatable items he possesses on that day. It will not matter when during the year that wealth came into his possession and nor will the wealth spent throughout the year be taken in to consideration.

If a person has a money purchase or personal pension scheme (provided they are shariah compliant), then zakat must be paid on the value of the zakatable assets the pension scheme holds. The help of an accountant should be sought in order to determine this. If one is unaware of the zakatable assets then as a precaution zakat should be paid on the whole value of one’s pension pot. Zakat does not need to be given on a final salary pension scheme.

A person with a student loan should only deduct any outstanding repayments which a due on his zakat due date, any future repayments will not be deducted. Furthermore, this ruling will only apply until the actual loaned amount is repaid, any interest will not be deducted.

If a property is being rented out, zakat does not need to be given on the value of the property. Rather, zakat will be due on any income which has been generated from the rent and is in a person’s possession on his zakat day. If a portion of this rental income has already been spent before a person’s zakat due date, then this will not be taken into consideration (i.e. zakat does not need to be paid on the amount spent already).

Zakat will be given according to the market value of the merchandise on a person’s zakat due date.

The most precautious opinion with regards to a such a debt is that it shouldn’t be deducted at all from one’s zakatable assets. However, some contemporary scholars have given allowance for the next 12 months of repayments to be deducted. (This allowance would only apply until the actual borrowed amount is repaid. Anything extra that a person has to pay will not be deducted at all from ones zakatable assets.)

Zakat is only given on gold and zakat. Hence, zakat will not need to be given on platinum jewellery (provided it is not business merchandise).

Zakat will need to be given on all gold and silver jewellery.

Zakat should be given according to the value of the gold/silver which one would receive if he/she was to sell it in one’s local market. This can be found out by asking local jewellers how much they would purchase the gold/silver for.

If the gold/silver jewellery contains precious stones – such as diamonds etc – then the weight of the precious stones will be deducted from the weight of the jewellery and zakat will be given according to the weight of the actual gold/silver.

Zakat does not need to be given on precious stones e.g. unless they were bought with the intention of reselling.

There are a few ways Zakat on gold and silver can be paid:

• It is permissible to give actual gold and silver in Zakat. For example, if someone has gold jewellery that weighs 100 grams, she can give 2.5 grams of gold as Zakat on the jewellery.
• It is also permissible to pay zakat by giving give something else — such as medicine or blankets or flour etc. – that holds the same value as the zakat that needs to be given.
• One may also borrow money from someone else in order to pay their zakat and then pay the debt off at a later time when they possess cash.

Unpaid zakat for previous years will still remain due. A person should try to his best to estimate the amount zakat and pay accordingly.

Zakat can be paid using other money as well. It is not necessary to pay zakat using the money he set aside only.

Money which is placed in donations boxes that one has at home is still islamically regarded as one’s wealth until he does not hand it over to the masjid, charity etc. Hence, zakat will need to be paid on the money which is inside box if a person’s zakat date arrives and he has not yet handed that money t the masjid, charity etc. If one is unaware of how much money is inside the box, he should try his best to estimate and give Zakat accordingly.

If the gold used in the jewellery is not pure gold (and the jewellery was not bought with the intention of reselling) then the ruling on it is as follows:

o       If the ‘gold’ contains 50 percent gold or more (i.e. it is 12 carat gold or more), it will be counted as pure gold in the sense that the total weight of the jewellery will be taken into consideration when calculating Zakat. However, the market value of pure gold will not be used to calculate Zakat; instead the market value of the same type of gold will be used. For example, for 18 carat gold jewellery, the market value of 18 carat gold will be used to calculate Zakat.

o       If the ‘gold’ contains less than 50 percent gold (i.e. it is less than 12 carat gold), then there are two possible scenarios:

– If it is not possible to melt and separate the gold from other metals (due to the gold content being so little for example), it will not be counted as gold at all and therefore Zakat will not be obligatory on it.

– If it is possible to melt and separate the gold from other metals, Zakat will be obligatory on only the gold content. In 9 carat gold, for example, it is possible to melt and separate the gold from other metals; therefore, Zakat is payable on 9 carat gold, albeit only on the gold content. For example, if someone has 9 carat gold jewellery that weighs 10 grams, she has to pay Zakat on 3.75 grams of pure gold (as 9 carat gold contains 37.5% pure gold; and 37.5% of 10 grams is 3.75 grams). Therefore, if the market value of pure gold is £50 per gram, 3.75 grams of pure gold will be worth £187.50. Hence, she will have to give £4.69 (2.5% of £187.50) in Zakat. (The rulings mentioned above for gold jewellery also apply to silver jewellery.)

White gold is an alloy of gold and at least one white metal, usually nickel, manganese or palladium.

Thus, white gold is treated like normal gold and is subject to Zakat.

The amount of Zakat payable would be calculated by multiplying the full weight of the jewellery by the price per gram for gold of that carat.

For example, if one has an 18-carat white gold bangle weighing 50 grams, then 50 grams would be multiplied by the price of a gram of 18 carat gold.

Likewise, if one has a 9-carat white gold bangle weighing 50 grams, then 50 grams will be multiplied by the price of a gram of 9 carat gold.

If the medicines were bought with the intention of reselling then Zakat will be necessary on the market value of the medicines.

If the glasses were bought with the intention of reselling then Zakat will be necessary on the market value of the glasses.

A child who has not reached the age of puberty is not liable to pay zakat, regardless of how much wealth they own.

There is no Zakat on interest money, rather the whole amount of interest should be returned to its rightful owner or be given in sadaqah without the intention of reward if the owner is unknown.

If a wife possesses wealth equal to Nisaab, then it is her responsibility to pay her own Zakat, her husband is not responsible. However, if the wife wife grants permission to her husband to pay her Zakat and the husband pays on her behalf, her zakat obligation would be fulfilled.

If they are eligible for zakat, then it will be permissible to give to them.

If the loan provided to someone is of such a nature that its repayment is anticipated or the loan is acknowledged by the debtor, then it will be compulsory on the creditor to pay zakat on such a loan. However, one will only be liable to pay the zakat after the debt has been repaid.

In regards to the method of paying zakat on such a loan one has two options:

1. Pay the Zakat on the loaned amount on a yearly basis by including it in your Zakat calculation with other zakatable assets, even though the loan has not been received yet.
2. Pay the Zakat once the debt is received for all the previous years.

If the loan is such that the creditor has lost all hope of being repaid, then zakat will not be compulsory on such a loan. If one thereafter receives the money; fully or partially, he will not need to pay zakat for the previous years

It is not permitted to give Zakat to one’s parents or grandparents.

A poor person is one who does not possess surplus wealth equal to the value of nisab.

If they are eleigible for receiving Zakat, then it will be permissible to give Zakat to a person’s in-laws.

A person who is mentally insane is not liable to give to give Zakat.

If a person possesses wealth equal to nisab, it is permitted for him to give Zakat before his Zakat date. Thereafter, when his Zakat date arrives he may minus the amount that he has already paid from the Zakat which is due on him.