Q: I have a death committee within my family which has about £7000 in it, do we have to pay Zakat on it? There are about 20 people, who put in 100 pound each for a certain amount of time. The money will be used when someone passes away to cover the cost of the funeral.
A: There is no Zakat due on such contribution.
From the details you have provided, this scheme is similar to a Tabarru’ contract which is based on voluntary charitable actions/donations. The fund is no longer owned by any contributors.
For the validity of the Zakat one must have ownership of the asset on which the Zakat will be due.
