Zakaat on a long term investment and retirement annuity
Question
I have 2 investments and want clarity on my responsibility when it comes to zakaat.
1. I have purchased shares in company x for long term investment (probably 5 to 15 years). Do I pay zakaat on the quarterly/yearly dividends received or do I pay zakaat on the full value of the share?
2. I am investing in a retirement annuity, which is now only accessible upon my retirement. Do I pay zakaat yearly on the amount that is in my retirement account or would I only pay zakaat when the investment matures (when I retire)?
Answer
1. At the time of calculating your zakaat the value of the zakaatable assets proportionate to your share should be worked out and based on that you will discharge your zakaat.
2. Voluntarily contributing to a retirement annuity is not permissible. One should, as soon as possible, cancel it. Nonetheless, you will calculate zakaat on the amount you have contributed.
And Allah Ta'ala (الله تعالى) knows best.
- Answered by
- Mufti Ebrahim Salejee (Isipingo Beach)
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