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Question: What is the Zakat on a Shariah-compliant investment account based on Wakalah? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer: Zakat on a Shariah-compliant investment account depends on the nature of the investment. If such investments are made into Shariah-compliant money market products, the entire...
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Question: Is there Zakat on an investment in a start-up company? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer:  Zakat on a start-up depends on the underlying net Zakatable assets of the company. An investor will pay Zakat (2.5%) on the percentage of shareholding in net...
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Question: What is the Zakat liability on a fixed-term annuity? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer:  Zakat is not due on the total amount in a fixed annuity yet to be received. The Fiqh (jurisprudence of the answer): An annuity is a contract between you and...
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Question: How are raw materials, inventory and finished goods valued for Zakat? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer: 1. Raw material – for Zakat purposes, will consider its current value (usually difficult to determine, so may use cost price alternatively)  2. Work in progress...
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Question: What is the Zakat treatment for prepaid expenses? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer: The prepaid sum is no longer in one’s ownership and as such, it is not Zakatable. Prepaid expenses are future expenses that have been paid in advance. In other words, prepaid expenses are costs that have...
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Question: Is Zakat due on Sukuk al-Ijarah investments? In the Name of Allah, the Most Gracious, the Most Merciful. As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.  The Answer: Ijarah Sukuk is based on an underlying Ijarah structure. Certificates are issued by a special purpose vehicle that entitles the holders to an ownership interest and a right to a return in proportion to...
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    Q. How long is the course? A. There is no fixed time limit. We aim to complete the entire reading of Majallah al-Ahkam al-Adliyyah within 3 years. However, this is just an estimation and could be more. The objective of this specialisation is not the time, but the substance and focus to truly...
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Hedging involves reducing overall risk by taking on an asset position that offsets an existing source of risk. Its strategies encompass a broad range of risk tolerance and investments, such as but not limited to, debt and equity securities, commodities, currencies, derivatives, and real estate vehicles. The most widely used equity longshort strategy involves simultaneously...
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Commodity swaps and equity swaps are financial derivatives. In commodity swaps, exchanged cash flows are dependent on the price (floating/market/ spot) of an underlying commodity. A commodity swap allows a customer to secure a maximum price for a commodity in lieu of a fixed amount. In return, he/she gets payments based on the market price...
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Foreign exchange trading has been one of the fastest-growing activities among private investors in the past 15 years. According to research by Citi in 2014, 4 million people are now trading currencies online, and retail traders account for around 20 per cent of the average daily turnover of the global spot forex market. An estimated...
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