Question

I have an investment which i am unable to take funds out of and will only have access to the fund when it matures. I know I need to pay zakat on it but currently I do not have the funds to pay zakat on the funds.
Please can you advise:
1) Would I need to borrow or take a loan to pay the Zakat immediately.
2) Can someone else (family member) pay zakat from their money on my behalf?
3) Can the Zakat be paid in accruals after the investment matures? i.e after 5 years pay 12.5%.

Answer

The capital which you have invested is zakatable and can be paid immediately,  however, you are not obliged to pay zakat until you receive the capital back. Upon receiving the capital if you have not paid zakat on that sum previously, you will pay zakat for the previous years. Hence, in response to you question:

1. You do not have to borrow money to pay zakat on the capital. You can wait until you receive it back and then use it to pay the zakat for the previous years.  Bare in mind that in such a case you do not have to pay 2.5% of the full amount each year. For example, if you invested £1000 for ten years, the zakat for year one is 2.5% of £1000 which is £25. As for year two the total amount liable for zakat is £1000 minus £25 (zakat of year one) which means you will be paying 2.5% zakat on £975 and so on.

2. If they agree to pay your zakat for you and you are aware that they are paying your zakat then this will be permissible. Alternatively you could borrow the money from them and pay your zakat.

3. As mentioned above you can pay zakat after receiving the capital. See answer to question one for detail on how to do this.

Answered by:
Ifta Research Fellow

Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel