MS Omar Attorney

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Shariah Articles

Question on Zakah Implications of Compulsory Pension and Provident Funds

Dear Respected Brother, Shaykh MS Omar

It would be appreciated if you could assess the Zakah implications on my Deferred Pension because I’m receiving contradictory advice. Basically, the structure is  as follows:
When I joined Newco in 10/1987 it was a condition of employment to contribute to the Newco Group Pension Fund (NGPF), a non-Shariah compliant retirement fund.
At around 1996 most pension fund members were transferred into a provident fund, still called the NGPF.

During 1997 my work function was made redundant, and I was compulsorily retrenched from Newco in 12/1997.  This was solely the company’s decision, and I had no discretion in the matter.  Upon being retrenched, I opted for a deferred pension. This meant that my pension benefits remained in the NGPF until it was to be either withdrawn (with a higher tax impact before age 55) or when I became eligible for retirement (with a lesser tax impact at age 55+). The rules of the NGPF state that the normal retirement age is 63, and that early retirement is possible from age 53. To date, I had decided not to withdraw or retire from the NGPF, as I probably will continue working for another 4 years or so until age 63 at my current Employer, insha’Allah. I’m also a member of its non-Shariah compliant pension fund, which was also a condition of employment.

The guidance I received from an Islamic socio-welfare NGO was that because:
I had no choice in being a member of the NGPF; and I had specifically decided not to retire from the NGPF yet, and hence do not have access to the funds, it is not zakatable. The contrary guidance I received from an Investment Manager, is that because it was possible to retire from the NGPF since age 53, it is zakatable.
It would be appreciated if you were able to provide guidance on the above matter, including the principles upon which your valued opinion is based (~ ratio decidendi).  Please also indicate if there is consensus amongst scholars of the various Mathaaib on matters such as, or similar to the above set of circumstances.
JzkAllah again for your time.  Please let me know if you require any further clarification or additional details.


    1.    It is apparent that you were employed by Newco from October 1987 to December 1997, when your employment was terminated by way of retrenchment.( “ the Employment Period”)

    2.    During this employment period, you were obliged to contribute each month , as a deduction at source, to the Group Pension Fund ( NGPF) , as a mandatory term of employment.

    3.    No Zakah is payable by you, as a member of NGPF, during the approximately 10 year Employment Period,  because the monthly at- source deductions from your salary did not enter into your ownership but in fact were transferred to, and deemed to be owned by NGPF as a separate legal person or entity .لعدم الملك التام المملوك رقبة و يدا : راجع رد المحتار: كتاب الزكاة

    4.    In December 1997 , you became entitled to withdraw the lump sum proceeds of your pension fund benefits , ( “ lump sum amount “) following your termination of employment by way of retrenchment in October 1997.

    5.    At this point, ( December 1997), upon maturity, you became for the first time, the owner of the lump sum amount, acquired actual or constructive possession and control thereof, and were entitled to dispose or deal with the lump sum withdrawal benefits, as you pleased.

    6.    It follows that Zakah became payable on the withdrawal benefits constituting the lump sum amount, in the year of actual receipt thereof, ( December 1997) , and not for prior preceding years, during the Employment Period.

    7.    The fact that you voluntarily elected to transfer the lump sum amount to another retirement arrangement in the form of a Deferred Pension does not affect the Zakah position: you remain liable for Zakah , upon actual or constructive possession, and thereafter upon the passing of each lunar year , calculated as from the year of receipt  of  the lump sum amount. ( December 1997).

    8.    It should be mentioned that the lump sum amount in the form of the withdrawal benefit as at the 31 December 1997 is characterized in Shari’ah as compensation for services rendered in the past , and accordingly deemed halaal, irrespective of the source of accrual.  The amount representing the growth , over and above the aggregate contributions, does not constitute riba or impermissible income, because it is not a return on the ownership of the employee. Purification is therefore not required in respect of the withdrawal benefit upon maturity.

    9.    Now we turn to your employment situation after 1997, whereafter you joined a new employer, and currently remain employed: you are currently (post-December 1997) a member of a new separate pension fund ( “ the New Pension Fund”) in terms of a mandatory condition of employment, in terms of which your contributions are deducted at source and transferred by your new employer to the New Pension Fund. ( not connected to the previous voluntary deferred pension arrangement).

    10.    The same principles apply as set out in paragraph 3 above mutatis mutandis in the sense that your monthly contributions, deducted at source, are owned by the New Pension Fund, with the result that no Zakah is payable until the lump sum proceeds become due and payable to you, as a withdrawal benefit, in the year of actual receipt, upon termination of your current employment ( for whatever reason, including dismissal, resignation, retrenchment or retirement).

    11.    Once the member elects to transfer the lump sum withdrawal benefit, upon maturity, to another approved Fund ( eg Preservation Fund) , then the withdrawal benefit upon maturity is deemed to be in his or her Shari possession for all purposes, including the payment of Zakah. However, in this instance, the member will be responsible to invest the lump sum proceeds so received in Shari'ah-compliant investments.

    12.    The aforegoing answer accords with the conclusions of the illustrious Mufti of Pakistan, Mufti Shafei (ra) ( on The Zakaatability Of Provident Fund and Interest) and his distinguished son, Mufti Taqi Usmani,  and the relevant resolution 143 ( 9-14 April 2005) of the International Islamic Fiqh Academy (an organ of  OIC).

And Allah Knows Best
M S Omar
28 May 2022

Zakah Liability Of Clients in respect of Islamic Financial Instruments

1.    Current Account: الحساب الجاري. A current account is characterized in Shari’ah as a loan by the client to the bank, which is repayable by the bank on demand. In this sense , the repayment of the principal is guaranteed by the bank under all circumstances, on the analogy of a regular loan. On this basis, the credit balance is a strong debt, دين قوي , with the result that Zakah must be payable on the credit balance , as at the passing and completion of the lunar Zakah year عند تمام الحول ( “ the Zakah valuation date”) together with the aggregate value of any other Zakaatable assets, equal to nisaab.

2.    Investment Account : الحساب الاستثماري : the  cash amount invested by the client رب المال constitutes the capital of the special partnership in profit known as  Mudarabah. In terms of this  contractual arrangement, the client and the bank share the profits and losses of the Common Mudarabah Pool in a pre- agreed ratio. Zakah is accordingly payable  by the client on his or her invested  capital , together with any accrued profits thereon , as at the Zakah valuation date, irrespective of the duration of the investment, because the client is at all times the owner of the capital together with his or her share of the accrued profits, as reflected in  the relevant statement of account.( see Al - Mughni of Ibn Qudamah : vol2 : par :1929)

3.    Investment Sukuk : صكوك الاستثمار : these are certificates of equal value which represent a pro rata undivided share of beneficial ownership in the underlying assets of the portfolio . The owners of the certificates must pay Zakah , based on the Zakaatablity of the underlying assets which the certificates represent, as at the Zakah valuation date. يزكيها حملتها بحسب الموجودات التى تمثلها

4.    Take the following examples.

5.    Ijarah Sukuk : the holders of  Sukuk certificates own the underlying assets in pro rata undivided shares, through the conduit of a special purpose vehicle. The  jointly owned assets in turn are leased to third parties to generate returns for investors in proportion to  their investment. No Zakah is payable on the value of the underlying assets, because they do not constitute trading stock. Zakah is only payable on the net  unexpended income  , held as at the Zakah valuation date.

6.    Murabahah Sukuk : the Sukuk holders beneficially own the underlying tangible assets which are purchased and sold , on a Murabaha basis to third party purchasers. The tangible assets  for sale are deemed to be trading stock and Zakah is accordingly payable on the market value thereof, together with a pro rata share of any cash in the portfolio, so held as at the Zakah valuation date.

7.    Security Deposit : هامش الجدية: this represents an agreed amount paid by the client to the bank ,in advance of and prior to entering into a Shari’ah compliant financing transaction , held by the bank in trust,  on behalf of the client, as security for the fulfillment of the client’s  binding promise to enter into the financing contract. If the client reneges on his promise, the bank is entitled to recover any actual out of pocket loss arising from the breach of promise , limited to the difference between the proceeds of the sale of the relevant commodity to a third party, and the original higher price paid by the bank to the supplier, under the first sale between the supplier and the bank. The client must pay Zakah on the security deposit  held on it’s behalf, as at the Zakah valuation date, on the capital together with any accrued profits, if so held in an investment account. هامش الجدية: و هو المبلغ المقدم تاكيدا للوعد الملزم لتغطية ضرر النكول عنه

8.    Takaful : the monthly contributions paid  by members to a non- profit Takaful Fund ,  are deemed to be purely gratuitous. These contributions of members are received and are owned by the Fund , as a separate legal person, are managed in accordance with its rules, with the result that no Zakah is payable thereon by the member, in the absence of ownership. لعدم تحقق الملك التام :   فان محفظة التأمين لا زكاة فيها

9.    Bank Guarantee : خطاب الضمان له غطاء كامل : this refers to the situation where the bank , acting as agent of the client, holds  the client’s own funds , as collateral; the bank issues an on - demand undertaking, in favor of a third party beneficiary , to pay a specified amount upon the occurrence of a specified event, according to its terms. On this basis, the client must pay Zakah on the funds held on it’s behalf by the bank in a current or investment account, if so held as at the Zakah valuation date.

And Allah Knows Best
M S Omar
22 May 2022

Assisting Financially Distressed Persons Affected by Recent Flooding From Zakah Funds

    1.    The Holy Quran has specified eight categories of eligible recipients of Zakah. Save for the collectors of Zakah, ( العاملين عليها) , the remaining seven categories are entitled to receive Zakah based on their genuine need, namely , that the individual poor and needy Muslim does not own surplus assets equal to nisaab, over and above his or her basic necessities, as at the Zakah valuation date.

    2.    The poor and needy Muslim is the first specified category. Another important category is the Al - Ghaarimeenالغارمين: namely , those eligible debtors who are burdened with debt, and who do not have the capacity or financial means to settle their debts. ( Qurtubi) هم الذين ركبهم الدين و لا وفاء عندهم به. ه

    3.     In the Hanafi school, the Ghaarimeen are defined as that eligible Muslim  needy debtor who , after excluding his or her basic necessities, does not own surplus assets of any kind, equal to Nisaab. و لا يملك نصابا فاضلا عن دينه. الدرر المختار

    4.     Basic necessities, such as the value of a single residence, essential household furniture and effects, essential tools of trade, a servant, and a single motor vehicle , are not taken into account, in determining the eligibility of the recipient for Zakah, and are deemed for this purpose to be non - existent. لانه مشغول بحاجته الأصلية فاعتبر معدوما:  اللباب

    5.     It is preferable to pay an eligible debtor instead of a poor Muslim , because the burdened debtor is deemed to be in greater need. الدفع للمديون أولى من الدفع للفقير الغير المديون لزيادة احتياجه : رد المحتار

    6.     It is important to note that although the payment of  Zakah constitutes a spiritual and material purification for the Zakah - payer, the receipt thereof in the hands of the eligible recipient is absolutely pure and legitimate.( as a blessing from Allah )

    7. It is useful to bear in mind the well known statement of Caliph Umar (ra) to the effect that Zakah should be used to empower the eligible Zakah recipients; . و قال عمر إذا أعطيتم فاغنوا  ) كتاب الاموال

    8. At the same time, it is a settled principle that it is not necessary to disclose to the eligible recipient that the source of the funds are Zakah.

    9. The Holy Prophet صلى الله عليه و سلم stated that there are only three classes of persons who may ( out of genuine necessity) ask for Zakah : one category is that person who is affected by any kind of an epidemic or calamity, with the result that his property is destroyed; such affected person may ask until his or her needs are fulfilled.
 ان المسالة لا تحل الا لثلاثة .........
و رجل اصابته جانحة فاجتاحت ماله فيسأل حتى يصيب قوامًا من عيش...
الجصاص: احكام القران.

 10. .Imam Abu Hanifa(ra) has stated that it is permissible to distribute all the Zakah to recipients belonging to one specific category, based on the needs at the relevant time. اذا رأى ذالك بحسب الحاجة. A similar position has been adopted by Imam Malik(ra) , upon a purposive interpretation of the Zakah verses. ( Bidayah - al Mujtahid: Ibn Rushd).
 ذهب جمهور العلماء الى انه لا يجب تعميم الزكاة على الاصناف…قال ابن عباس في صنف وضعته  اجزاك.
الموسوعة الفقهية.

    11.    It should be noted that a Muslim is disqualified from receiving Zakah if he or she owns surplus assets, over and above the basic necessities, equal to Nisaab.

    12.    We have a duty to assist non- Muslims with non - Zakah funds. The Holy Quran enjoins us to do good to them and to be just to them, as Allah loves those who are just. ( S 60 : V 8).

M S Omar
23 April 2022

Basic Guidelines On Identity of Zakaatable Assets

1. Zakah is a fard obligation , arising on the Zakah valuation date ( eg : 1 Ramadan) on only specific , prescribed categories of assets, namely , on the complete ownership of the total aggregate  current market value of gold, silver, cash,  loans, shares and outstanding debt receivables , ( less relevant current liabilities) . Once so calculated, the amount of Zakah is a mandatory debt , due  and payable, on the valuation date, which must be discharged as soon as possible, by no later than 12 months. It may be discharged by unconditional delivery or transfer to the ownership of an eligible poor and needy recipient in cash or kind.

2. Any other asset, only constitutes a Zakaatable asset, at the Zakah valuation date, if such asset constitutes trading stock : that is, it was acquired at the time of purchase for the primary intention of resale, at a profit, and is therefore deemed to constitute trading stock. For this purpose, the word “ asset” includes all classes of  legitimate property, movable and immovable, acquired for resale.
 والأصل ان ما عدا الحجرين و السواءم  إنما يزكى بنية الزكاة: الدرر المختار.

3. Zakah is payable on trading stock, including raw materials, at the market value, or, otherwise in the case of manufacturers, retailers and wholesalers, at an estimated bulk value, calculated on the following basis: if the whole stock were notionally sold  by a willing seller to a willing buyer in a single indivisible sale transaction on the Zakah valuation date.( this may be equivalent to the cost price based on the established commercial practice of arm’s length voluntary sale of a buisness as a going concern.)

4. Shares in a solvent listed and unlisted trading public company , including equity unit trusts, acquired solely to hold as an investment ( and not as  trading stock for resale) : Zakah is payable thereon on the aggregate market value of the underlying Zakaatable assets, ( cash, stock and receivables, less relevant liabilities , or,  if difficult to calculate, at the market value thereof, on the Zakah valuation date.( with an adjustment of the rate at 2, 577 percent to take into account the lunar Hijri year, where applicable)..
 و يزكي ما يقابل اصل أسهمه من الموجودات الزكوية و هذا ما لم تكن الشركة في حالة عجز كبير بحيث تستغرق ديونها موجوداتها. قرار: 121:مجمع الفقه الاسلامي الدولي.

5. No Zakah is payable on the market value of rental producing immovable property ( letting enterprise) , unless the same was acquired  solely for purposes of resale at a profit, and therefore constitutes trading stock on the Zakah valuation date. Zakah is however payable on the net rentals received and remaining unexpended, on the Zakah valuation date.
 ان الزكاة غير واجبة في أصول العقارات والأراضي المأجور ة و تجب في الغلة ...
قرار2: مجمع الفقه الاسلامي الدولي

6. Zakah is payable on the sound component of book debt/ receivables, arising from the sale of trading stock , each year, if the the debtor is financially able, ( and is not in financial difficulty)or otherwise deliberately protracting.
 تجب زكاة الدين على رب الدين عن كل سنة إذا كان المدين مليئا باذلا: مجمع الفقه الاسلامي الدولي: قرار 1.

7. In relation to debts arising from services rendered by professionals etc ( and not the sale of tangible trading stock ) , Zakah is payable  in the year of actual receipt of the debt, according to the  classical well known debt categorization of Imam Abu Hanifah (RA).  However, his two students ( Imams Abu Yusuf and Muhammad RA) are of the view that Zakah is payable each lunar year on all categories of debts , which are deemed to rank equally as strong debts , as if , such debts are deemed in the constructive possession of the creditor. It is therefore prudent to pay each year.
 و عندهما : الديون كلها سواء قوية تجب الزكاة فيها قبل القبض: بداءع

8. In the case of compulsory membership of Provident and Pension Fund , arising from a mandatory term of employment, resulting in monthly deductions from salary at source, Zakah is payable only in the year of actual receipt, and and the cash proceeds are added to other Zakaatable assets in that year ( of receipt): the ultimate proceeds are treated as part of services rendered or in lieu thereof, hence there is no need to purify, irrespective of source of accrual.

9. In respect of voluntary contributions to retirement annuity funds, including preservation funds, outside the employment context, Zakah is payable each year on the member’s Fund value ( analogous to money voluntarily invested in a fixed deposit or participation bank account for a fixed period).

10. Deposits held in Trust by conveyancers and estate agents, pending transfer of immovable property: Zakah is payable thereon by the Purchaser, ( owner), on the Zakah valuation date, if registration of transfer has not  on that date occurred.

11. In respect of property originally acquired for  the purposes of development for resale at a profit ( eg: resale on sectional title), either complete or in course of construction, the developer must pay Zakah on the market value thereof, on the Zakah valuation date.( treated as trading stock).
 المنشآت قيد التنفيذ : تزكى بقيمتها يوم الوجوب و بحالتها الراهنة.
AAOIFI Standard 35 : 5/2 /6/3

12. Reserves or retained earnings in a Company are treated as a Zakaatable asset, and the shareholder is liable to pay Zakah thereon on his pro rata share thereof. In the Shafi’i school, and other schools , the Company is treated as a separate entity for purposes of calculating Zakah, with the result that Zakah may be paid by the company, as a separate legal entity, on behalf of its shareholders, if they so resolve.
على أساس تاثير الخلطة في حكم الزكاة   
 و قال الشافعي ...يجعل مالهما كمال واحد و تجعل عليهما الزكاة : بداءع
و أخذا بمبدأ الخلطة عند من عممه من الفقهاء  في جميع الأموال .

13. If a person owns Nisaab , at inception of the year, and thereafter during the course of the year receives ( a Zakaatable asset) from the same category , such receipt must be added to the  
Nisaab, and Zakah must be payable on the total aggregate value on the Zakah valuation date. For example, a person has cash of R 200 000,00 and receives dividends  or inheritance of R 100 000,00 one day before his Zakah valuation date, Zakah will be payable on R 300 000,00.
و من كان له نصاب فاستفاد فى اثناء الحول من جنسه ضمه اليه و زكاه به.

 14. In the Hanafi school, a person is required to make a specific bequest, in the form of a وصية ,  to pay outstanding Zakah, in which event , the Zakah will be discharged  by the executors and/ or heirs from one- thirds of his or her estate, calculated at time of death. On the other hand, in the Shafei school, the Zakah is a debt against the whole estate, and accordingly is an automatic charge against the estate, analogous to other contractual debts.

And Allah Knows Best
M S Omar
Updated:24 April 2020.


Guidance Note On The Transferring Zakah To An Agent Of An Eligible Recipient

1. There are various Islamic non-profit Organizations and Institutions that, by the Grace of Allah, sincerely serve the poor and needy in diverse forms of religious, educational, economic, and social empowerment and upliftment.

2. The beneficiaries are by and large poor and needy eligible recipients of zakah.

3. The question arises: how can zakah funds be legitimately used to promote the objects of the relevant Institution, for the ultimate benefit of the beneficiaries?

4. It is an established Shariah principle, that the zakah obligation is only properly discharged by way of the unconditional, absolute, transfer of the zakah from the competent zakah payer to the poor and needy eligible Muslim recipient. This is known as tamleek.

5. It is also a settled principle that the eligible poor and needy recipient may acquire possession and ownership of the zakah either directly, or, through his or her duly appointed agent, on his or her behalf. Possession by such duly appointed agent is deemed to be treated as a valid transfer of ownership of the zakah to the eligible recipient. In other words, the zakah obligation is discharged once the agent of the eligible recipient takes possession of the zakah on his or her behalf, because, at that point of possession (qabd), ownership of the zakah so possessed by the agent, passes to the eligible recipient, as principal.



On the Fundamental Differences Between Sukuk and Bonds

1.    A Sukuk certificate represents a pro-rata undivided share حصصا شائعة in the beneficial ownership of the underlying tangible assets, comprising the portfolio. As such, the investor shares in the profits and losses generated by the underlying assets. الغنم بالغرم A sale of the Sukuk certificate, in the secondary market, is in substance a sale of proportionate ownership in the underlying assets of the portfolio at their prevailing market value.

2.    On the other hand, a bond or a debenture is a debt instrument, in terms of which the investor loans money to the borrower, and receives periodic payments of interest in return, with the principal being repaid on maturity, irrespective of the performance of the underlying assets of the portfolio. A sale of the bond, at a premium or discount, to a third party, is in substance a sale of the debt, arising from the loan, and is accordingly prohibited.بيع الدين لغير من هو عليه لا يجوز

3.    A Sukuk must be redeemed at market value or at a mutually agreed value, determined at the date of redemption. An undertaking by the manager, in its capacity as a mudarib or partner or agent, to redeem or buy- back the Sukuk at the original face value, upon maturity, is prohibited under all circumstances. لا يجوز إطفاء الصكوك بقيمتها الاسمية بل يكون الاطفاء بقيمتها السوقية او بالقيمة التي يتفق عليها عند الاطفاء

4.    If all the underlying assets of the portfolio are converted to debt, then the rules relating to debt apply: the debts cannot be sold to a third party, except transferred by way of a cession,  at face value, with no premium or discount. الا بالمثل على سبيل الحوالة

5.    The manager or issuer of the Sukuk is a trustee امين, and accordingly cannot guarantee the capital of the Sukuk, except in the case of its liability arising from negligence or misconduct.التعدى او التقصير

And Allah Knows Best
M S Omar
9 October 2021

On Lifetime Donations by Parents to Children: Summary of Shariah Law Perspectives

    1.    Is it mandatory to make lifetime donations to one’s children in equal shares under all circumstances, in the context of the well known, Prophetic statement, “ Fear Allah, and do justice ( by exercising equality) between your children.” ? فاتقوا الله واعدلوا بين اولادكم ) بخارى

2.    The answer is that viewed in proper context, the majority of the jurists are of the opinion that equality in making donations to children is recommended, but not obligatory, subject to the conditions below. ذهب الجمهور الى ان التسوية بين الاولاد في العطايا مستحبة : اعلاء السنن

 3.    If the particular donation in question is made by the parent to only one child for a valid reason, such as genuine need, ( and the donation is not intended to prejudice the remaining children), such a donation is valid. A valid reason ( for preference) should be evaluated in the circumstances of each individual case, in the light of all relevant objective factors. التفضيل حرام و هي ان تكون الهبة بقصد التفضيل من غير داعية مجوزة لذللك او بقصد الاضرار الاخرين :  تكملة فتح الملهم : ملخصا

 4.    On the other hand, a donation may be made by a parent in favor of one child, to the exclusion of other children, without valid reason, as a naked preference,  and thereby constituting an arbitrary transfer of property ( to the obvious detriment of the remaining children). Such a donation is clearly impermissible. و جملة ذالك انه يجب على الانسان التسوية بين اولاده في العطية اذا لم يختص احدهم بمعنى يبيح التفضيل : المغني لابن قدامة : ٤٤٥٩

5.    The famous case of of the companion Bashir Ibn Nauman (ra) is a case in point: he donated his slave  to his one son, ( Nauman) , to the exclusion of his several remaining children. He sought the approval of the Holy Prophet صلى الله عليه و سلم to the donation. The Prophet ( saw )replied: “ Have you given each of your children the same as this? He  replied,” No” ; the Prophet(saw)  responded: “ Then, revoke the donation ( by taking the slave back.”): see :Al - Muwatta:1473 ( Bashir (ra) revoked the donation). اكل ولدك نحلته مثل هذا ؟ فقال : لا : فقال رسول الله : فارتجعه

 6.    The  Prophet صلى الله عليه و سلم refused to sanction and witness this donation ( of Bashir) because the preference(in this case)  in favor of one child was purely arbitrary, effected without any valid reason and accordingly prejudicial to the remaining children; hence , according to one narration , the Prophet (saw )refused to be a witness to an “ injustice “; لا تشهدنى على جور ; in another narration, the Prophet ( saw) responded to the effect that , “ take as a witness  to this donation, another person ( and not me). “  If the donation in question was absolutely prohibited,  ( and not simply reprehensible) , the Prophet ( saw)  would not have advised Bashir to take another person as a  witness thereto. فاشهد على هذا غيري

7.    In a nutshell, in the absence of a valid reason and legitimate purpose,  the jurists are unanimous that lifetime donations by parents to children must be equal ; ( “ Be equal amongst your children in respect of gifts; If I were to make a preference in the matter of gifts, I would have preferred women over men” :Hadith ).  سووا بين اولادكم في العطية و لو كنت موءثرا لاثرت النساء على الرجال

8.    The overwhelming majority of jurists state that the lifetime donation  must be effected in equal shares as between male and female. The rules of inheritance only apply after death.

9.    To the extent that a parent wishes to accelerate the division of his or her estate, to avoid a future dispute after death, by donating in his or her lifetime, according to the shares of inheritance: that is, a  male child takes double that of the female, such is permissible . و المقصود الاستعجال لما يكون بعد الموت و حينئذ ينبغي ان يكون على حسب الميراث: المغني : ملخصًا مع تكملة فتح الملهم

And Allah Knows Best
M S Omar
17 October 2021

Fatwa of Allamah Mufti Taqi Usmani حفظه الله on the Permissibility of Covid 19 Vaccinations

الاستاذ الفاضل الكبير حفظه الله

ما حكم التطعيم بلقاح فيروس كورونا ( Covid 19) في الوقت الراهن : هل هو اباحة او استحبابا او وجوبا ، خاصة اذا كان المرض  يؤدي ألى الأضرار بالغير.
محمد شعيب عمر
المحامي بالقضاء المدني و الشرعي ،
جنوب افريقيا

12 September 2021

Answer of Allama Mufti Taqi Usmani حفظه الله

بسم الله الرحمن الرحيم
حكم اختيار أسباب لعلاج مرض بالمعروف مباح ومسنون فى الشريعة، وفى حكمهاأسباب معروفة للوقاية عن  المرض، وأخذ اللقاح من قبيل أسباب الوقاية فهو مباح وعلى الأكثر فهو سنة. وإذا صدر قرار ملزم بأخذ اللقاح من الحكومة، يحتمل أن يصير أخذ اللقاح
  واجبا بسبب أمر ولي الأمر


Our Distinguished Teacher

“ What is the Shariah ruling relating to the taking of vaccination against the Covid -19 virus in the current circumstances? Is such vaccination permissible, preferable, or compulsory, especially where the contagiousness of the disease leads to the  harming of  other persons “.

Fatwa of Allamah Mufti Taqi Usmani حفظها الله

“ The ruling of voluntarily adopting the generally recognized means  of treatment for a disease is permissible and sanctioned in the Shariah( as Sunnah). Such permissibility includes the well known means  of prevention of a disease. The taking of a vaccination falls within the means of prevention , and is accordingly permissible;  at the most, it is Sunnah. If the government issues a binding decision for taking a vaccination, then,  the taking of a vaccination ought to become compulsory by reason of a directive of the head of state.”

Translated: M S Omar
And Allah Knows Best
27 September 2021

Summary of Key Differences Between Conventional and Islamic Banking

1. The primary function of  money is that it is purely a medium of exchange. Money should not be traded as a commodity which fetches a price in the form of interest, as is the case in conventional banking practice. In other words, money cannot be the object of trade per se; to the extent that money is exchanged for money, such exchange should be effected at face or par value, with no discount or premium, on either side. The logical result of this, is that any contractually stipulated increase on a  fixed debt arising from a recognized commercial contract , such as a sale, is deemed to be impermissible interest. This also means that a monetary debt cannot be sold at a premium or discount. The 2008 financial crisis in the USA , attributed to the sale of subprime mortgage debt at a premium, could have been avoided, if the basic Shariah principle prohibiting the sale of a debt had been adhered to.

It should be borne in mind that , from an Islamic perspective, a loan is deemed to be a gratuitous , humanitarian transaction, to be resorted to in genuine need, generating no contractually agreed return or benefit thereon. To the extent that the lender wishes to generate a return on his loan, the lender must participate as an equity partner in the business of the borrower, and thereby share in the profits and losses of the joint venture.

2. The concept of risk in Islamic banking is fundamental: it is intertwined with profit and loss: a trader is not entitled make a profit,  unless the trader has correspondingly assumed the risk of loss  ( ضمان) in the underlying commodity. For example, when a bank buys a commodity , and resells the same , in terms of a separate , independent transaction, at a profit to a client, the profit represents the return in lieu of the Shari’ risk , that the bank, as owner, has assumed in the commodity. In order to assume the requisite risk, the bank must take actual or constructive delivery of the commodity, and thereby assume the risk of destruction or deterioration, in any form, prior to its resale to a third party. This requirement that the acquisition of profit is intertwined with the assumption of risk, is expressed in the well known Fiqh maxim من له الغنم فعليه الغرم

3.  Shariah law prohibits a commercial contract of gain, founded upon intolerable Ghararغرر, as a foundational principle: manifest uncertainty of contractual result or outcome,  which largely permeates the subject matter of the contract( مستور العاقبة ). A good example is a conventional insurance contract: the insurer undertakes to indemnify the insured against a future specified uncertain event , which may or may not occur, in exchange for a premium. The insurer gains absolutely if the event never occurs. Even if the  future contingent event were to occur , it’s timing, nature and extent is manifestly uncertain at the time the insurance contract is concluded.

4.  The subject matter of all the financial instruments of an Islamic Bank is Shariah-compliant commodities, whose ownership  and risk is transferred to the client , in accordance with the requirements of the specific recognized contract, such as a Murabaha and a Musharaka. In this regard, two points should be noted. First, the reciprocal consideration on both sides ( delivery of commodity and payment of price, both deferred) should not be contractually stipulated and obligated to be deferred, on both sides, as this falls within the meaning of the well-known prohibition, بيع الكالى  بالكالى او بيع الدين بالدين. ( effectively, deferred in exchange for deferred, to prevent interest and disputes). Second, one contract must not be conditional with another, in a single “ binding “ transaction, such as, “ I sell you my house, on the condition that you lend me R 100 000,00”.  This falls within the meaning of the well-known prohibition النهى عن الصفقتين فى صفقة واحدة, whose rationale is to avoid interest in the guise of two interlinked conditional contracts, the one dependent upon the performance of the other. This prohibition should be distinguished from a situation where the one contracting party makes a  unilateral binding promise to do something, outside the contract of sale, whose conclusion and effect is immediate, and is not dependent upon the prior or subsequent unilateral promise.الوعد المنفصل عن عقد البيع لا يلتحق بأصل العقد.

5. The Mudarabah partnership pool of an Islamic bank ( or , an Islamic window) is constituted by the total aggregate funds of investors ( comprising all investment accounts), which funds are advanced to the bank upon trust, الامانة , and employed by the bank to best advantage, in its capacity as the Mudarib( working partner) , inappropriate Shariah compliant instruments and transactions, upon a pre-agreed profit sharing ratio, as agreed between the investors, on the one hand, and the bank , on the other. Losses in the ring-fenced, separate Mudarabah pool , which are attributed to inter alia market fluctuations,  are borne by the investors. However, the bank remains liable under all circumstances for losses attributed to proven negligence or misconduct التعدى و التقصير. By contrast, depositors in a conventional bank make loans to the the bank, and receive in return a fixed rate of interest thereon.

And Allah Knows Best
M S Omar
19 September 2021

Zakah Treatment of Shares in Listed and Unlisted Companies

1. Ownership of a share in the issued share capital of a listed or unlisted company , whose core activity is halaal,  represents ,in substance , a pro-rata undivided share in the underlying assets of that company, which may comprise of Zakaatable or non - Zakaatable assets, or, a combination of both.  يمثل السهم حصة شائعة في موجوداتها الزكوية..... و محل العقد عند تداول الاسهم هو هذه الحصة الشائعة .
2. The shareholder should, by reference to the last available financial statements, identify and reasonably estimate the value of the underlying Zakaatable assets, after deducting  those specific liabilities incurred in respect of financing  only Zakaatable assets, at the arrival of his or her final Zakah valuation date, at the end of the relevant Zakah year. If the shareholder is unable to do so , for whatever reason, he or she should then pay Zakah on the market value of the share as at the Zakah valuation date, at the end of the year.  الاستثمارات في الأسهم فغرض الاحتفاظ بها ( النماء : اذا امكن عن طريق الشركة معرفة ما يخص السهم من الموجودات الزكوية: النقود و عروض التجارة و الديون المرجوة السداد فانه يزكى ذالك...
3. Zakaatable assets, as prescribed by the Shariah, are gold,  silver, cash, and sound book debts , which are subject to Zakah under all circumstances, whether productively employed in commerce or not. اذا ظهر النماء او لم يظهر لان السبب قد يتحقق راجع: البناية فى شرح الهداية

4. Any other asset is exempt from Zakah, unless such asset was acquired for the primary intention of resale, and is therefore deemed to constitute trading stock, in the hands of the owner , as at the arrival of the Zakah valuation date, at the end of the relevant year. الاصل ان ما سوى الاثمان من الاموال لا تجب فيه الزكاة الا بإعداده للتجارة و نواه للتجارة.

5. Shares in a company, therefore, acquired with the primary intention to resell at a profit ( and not to hold as an investment for capital growth) constitutes stock in trade, with the result that Zakah is payable thereon on the Zakah valuation date at the market value thereof, as at the the Zakah valuation date.
من اشترى اسهمه بنية التجارة فانه تجب عليه زكاة عروض التجارة، حسب قيمتها السوقية،
وأما المساهم المستثمر ، الذى لا يقصد بشرائها المتاجرة و المضاربة فيها، و إنما قصد الاستثمار طويل الأجل ، فانه يؤدي الزكاة عن موجودات الشركة الزكوية

6. Zakah may be paid by the shareholder,  in that capacity, pro-rata to shareholding, ( Hanafi school) , or, by the company as a separate legal entity( in substance, upon the partnership principle) , if the shareholders resolve to do so. The other schools ( mazaaib) treat the assets of a partnership, held in co- ownership, by the partners, as the ( notional) property of a single owner, ( analogous to a legal person) for Zakah purposes. و تفسير ذالك ان مالكا و الشافعى و اكثر فقهاء الامصار اتفقوا على أن الخلطاء يزكون زكاة المالك الواحد. راجع بداية المجتهد

7. If the underlying assets of a specific company are exempt from Zakah, then Zakah is payable on the dividend income, or the unexpended remainder thereof, which is added to the aggregate value of the Zakaatable assets on the Zakah valuation date, at the end of the relevant year: gold+silver +cash+book debts +stock- less allowable liabilities: 2.577% ( to cover lunar year). و اذا لم يكن لدى الشركة موجودات  الزكوية فانه يزكى ما يبقى من صافى الايراد فى نهاية الحول : الشركة

8. In relation to a subsidiary company, it may separately calculate its own Zakah, or, alternatively , the holding company may determine its pro-rata share of Zakaatable assets in the subsidiary,if any, on the same basis as stated in paragraph 2 above. Care should be taken to ensure that there is no double counting.

9. If the shareholder sells his or her shares , during the course of the year, then the proceeds thereof, or, the unexpended remainder , at the end of the year, is  added to the aggregate value of the Zakaatable assets, will be subject to Zakah. اذا باع المساهم اسهمه في اثناء الحول ضم ثمنها الى ماله الزكوية و زكاه معه عندما يجيء حول زكاته.

10. The aforegoing approach is consistent with the resolutions of the  distinguished global Islamic Fiqh Academy: resolutions number:28/3/4 and 121/3/13.

واللة اعلم بالصواب.

And Allah Knows Best
MS Omar
Updated: 15 May 2021

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I personally know the honourable Shaykh Mahomed Shoaib Omar for over thirty years. I found him to be an ardent seeker of knowledge, quick of mind &  constantly devoted to the study of the books of fiqh &  has written himself a number of papers. He has been amongst the foremost participants in drafting the Muslim Personal Law for S.Africa, so that it may be enforced there; and the majority of local Ulama have endorsed this.

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