Unit trusts
Category:
Business Dealings & Money Matters
According to Madhhab:
Hanafi
Reference:
1440-285
Question:
Around 20 years ago
my uncle had invested some money under my name into the following unit trust:
Nedgroup investments rainmaker fund.
Today the amount has grown considerably.
I need to know that if I withdraw this money would it be halaal?
Also if I don't withdraw it do I have to pay zakaat on it?
If the money is not halaal what should be done with it?
my uncle had invested some money under my name into the following unit trust:
Nedgroup investments rainmaker fund.
Today the amount has grown considerably.
I need to know that if I withdraw this money would it be halaal?
Also if I don't withdraw it do I have to pay zakaat on it?
If the money is not halaal what should be done with it?
Answer:
The investment lies with a conventional bank which generally pays interest on all amounts invested with them and we assume that this is the reason for you posing the question to us. Interest has been declared impermissible in the Quraan and Hadith, hence it will not be permissible for you to derive any sort of benefit from the interest funds. The interest amount should be given out in charity ideally to poor Muslims that are eligible for Zakaat, without any hope of reward. As for the capital that you uncle invested, you are entitled to use the capital without any restriction whatsoever.
You will be required to pay Zakaat on the capital amount only and not the interest, when calculating your annual Zakaat. Similarly, if Zakaat was not discharged on the capital amount (that was invested) for the past years, whereas you were required to pay Zakaat on your Zakaatable assets due to possessing the Nisaab (over the years), then you are required to pay Zakaat on the investment amount for the past years as well.
And Allah Ta'aala knows best
ANSWERED BY: Mufti Mohammed Desai
CHECKED AND APPROVED BY: Mufti Muhammed Saeed Motara Saheb D.B
Date: 24 Jumadal Ula 1440 - English Date: 31 January 2019