Zakaat on a collateral
Question
Ahmad loaned Cassim R100 000 in cash. Cassim gave 2 kruger coins as a security on the loan (todays value approximately R56 000).
Who pays zakaat on the 2 kruger coins? Who pays zakaat on the loan of R100 000?
Answer
Zakaat is not compulsory on a collateral. Hence, neither Ahmad nor Cassim will have to pay zakaat on the both kruger coins for the entire period that they remain as a collateral. Ahmad will have to pay zakaat on the R100 000 loan. However, he has a choice of paying the zakaat on the loan for each year, or upon receiving it, he can pay the zakaat for the present year as well as the previous years.
And Allah Ta'ala (الله تعالى) knows best.
- Answered by
- Mufti Zakaria Makada
- Checked & approved by
- Mufti Ebrahim Salejee (Isipingo Beach)
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