Life insurance to pay estate duty

Category: 

Business Dealings & Money Matters

According to Madhhab: 

Hanafi

Reference: 

1440-266

Question: 

I would like to find
out about the permissibility of taking out life insurace only to pay the 25%
estate duty tax to SARS. 


Answer: 

Life insurance is totally prohibited under Islamic Law as it entails aspects that are regarded to be gambling and interest in Islam and both these have been prohibited in Quraan with severe warnings. (Fataawa Mahmudiyyah Vol. 16 Pg. 391). It would therefore be impermissible to take out optional life insurance for any reason what so ever. One could opt for other permissible ways of avoiding the estate tax using the services of an experience estate planner. However, his solutions should be given to a Mufti to look over as the laws of the country differ with the Islamic laws regards trusts, gifts, saving in others accounts etc.

AND ALLAH TA'AALA ALONE IN HIS INFINITE KNOWLEDGE KNOWS BEST
ANSWERED BY: Abdullah Bin Riyaadh 


CHECKED AND APPROVED BY: Mufti Muhammed Saeed Motara Saheb D.B. 
Islamic Date:21 Jumaadal Ula 1440 - English Date: 28 January 2019

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