Shares, unit trusts and equity investments that you have purchased with the intention to make a profit and resell – or through which you receive dividends are all Zakatable.
Differences arise amongst scholars regarding:
- 1) The type of business that the company deals in
- 2) Considering it similar to the Zakat on business and trade. This is the preferred opinion and the one that we at NZF adhere to
Types of shareholders
There are two types of shareholder:
- 1) The person who buys shares as an investment and wants to attain dividends – this type of shareholder pays Zakat at book – NOT market value
- 2) The person who buys shares to trade – i.e. trading stock. This type of shareholder must pay Zakat on the market value