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.
And Allah knows best!
Mufti Billal Omarjee