Question:

I’m due some money back from HMRC using a tax scheme. The way it works is you put some money in a new company, and if you meet all the conditions you can claim back the tax you paid for last 2 years. As of now i have just put money into this new company, i still need to submit an application to HMRC to approve and then i can claim back the tax i paid over the last 2 years. I know that we meet all the criteria and it will 99.9% be approved.

My thinking is that because i have started the tax scheme process by putting the money in, and i know i will be owed a refund, that i need to pay zakat on the amount owed, even though i havent submitted an application or received the money as of today. Is that correct? [Question Published as Received]

The Fatwa

In the Name of Allah, the Most Gracious, the Most Merciful

The Answer

The Fiqh of the Answer

Though this refund may be classified as a form of repayment or incentive from a tax viewpoint, it does not hold the same legal standing under the guidance of Sharī’ah. This payment is not a binding liability on the creditor, as it is not owed in exchange for a debt, sale or service. Instead, it is an incentive granted by the creditor, which is at their discretion and thus categorised as tabarruʿ(optional gift). As such, the payment is contingent on their willingness to disburse it, making it non-obligatory.

Islamic jurisprudence and the principles of Sharī’ah establish that wealth only becomes subject to zakat when it is fully considered in one’s ownership. The principle is that a gift or charitable payment is not complete in ownership until it has been received by the recipient. This is a universal principle (aṣl) found across the corpus of fiqh and is mentioned in the most authoritative classical sources such as the al-Aṣl of Imām Muḥammad Ibn al-Hassan al-Shaybānī (d.189 AH).

Imām al-Sarakhsī (d.483 AH) explains in al-Mabṣuṭ that even a mahr (dowry) is not considered part of a woman’s wealth for zakat purposes until it is physically in her possession, as ownership of such property (ṣilah) is not complete without possession. Similarly, inheritance and other forms of wealth transferred (gifts or non-binding transfers) do not obligate zakat until possession is taken.

Accordingly, at your zakat anniversary date, if the amount has not yet been transferred to you, it will not be counted in your zakat calculation. To conclude, since this payment is not obligatory (from a Sharī’ah standpoint), and remains at the discretion of the creditor, and because Sharī’ah views gifts and voluntary payments as incomplete until received, this ‘refund’ will not affect your zakat obligation until it is in your actual possession.

And Almighty Allah Alone Knows Best

Maulana Ammar Y Badat
Trainee Mufti

Reviewed and approved by
Mufti Faraz Adam
Darul Iftaa Muadh ibn Jabal
www.darulfiqh.com 

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وَهُوَ الصَّدَاقُ فَلَا يَكُونُ نِصَابَ الزَّكَاةِ حَتَّى يُقْبَضَ يُوَضِّحُهُ أَنَّ الْمِيرَاثَ صِلَةٌ شَرْعِيَّةٌ وَالصَّدَقَةُ لِلْمَرْأَةِ فِي مَعْنَى الصِّلَةِ أَيْضًا مِنْ وَجْهٍ قَالَ اللَّهُ تَعَالَى ﴿وَآتُوا النِّسَاءَ صَدُقَاتِهِنَّ نِحْلَةً﴾ [النساء: ٤] أَيِّ عَطِيَّةً وَمَا يُسْتَحَقُّ بِطَرِيقِ الصِّلَةِ لَا يَتِمُّ فِيهِ الْمِلْكُ قَبْلَ الْقَبْضِ فَلَا يَكُونُ نِصَابَ الزَّكَاةِ (المبسوط للسرخسي)

 (قَالَ): وَلَوْ أَنَّ رَجُلًا وَهَبَ لِرَجُلٍ أَلْفَ دِرْهَمٍ فَحَالَ عَلَيْهَا الْحَوْلُ ثُمَّ رَجَعَ فِيهَا الْوَاهِبُ بِقَضَاءٍ فَلَا زَكَاةَ فِيهَا عَلَى الْوَاهِبِ؛ لِأَنَّهَا لَمْ تَكُنْ فِي مِلْكِهِ، وَلَا عَلَى الْمَوْهُوبِ لَهُ؛ لِأَنَّ مَالَ الزَّكَاةِ اُسْتُحِقَّ مِنْ يَدِهِ بَعْدَ كَمَالِ الْحَوْلِ بِعَيْنِهِ وَيَسْتَوِي فِيهِ الرُّجُوعُ بِقَضَاءٍ، أَوْ بِغَيْرِ قَضَاءٍ لِأَنَّ حَقَّ الْوَاهِبِ فِي الرُّجُوعِ مَقْصُورٌ عَلَى الْعَيْنِ فَيَسْتَوِي فِيهِ الْقَضَاءُ وَغَيْرُ الْقَضَاءِ بِمَنْزِلَةِ الْأَخْذِ بِالشُّفْعَةِ، وَإِنْ لَمْ يَحُلْ عَلَيْهَا الْحَوْلُ عِنْدَ الْمَوْهُوبِ لَهُ حَتَّى اسْتَفَادَ أَلْفَ دِرْهَمٍ ثُمَّ رَجَعَ فِيهَا الْوَاهِبُ بِقَضَاءٍ، أَوْ بِغَيْرِ قَضَاءٍ فَلَا زَكَاةَ عَلَيْهِ فِيهَا لِمَا قُلْنَا لَهُ، وَيُزَكِّي الْمَوْهُوبُ لَهُ الْمَالَ الْمُسْتَفَادَ إذَا تَمَّ الْحَوْلُ (المبسوط للسرخسي)

لأن البيع قد يكون تامًا قبل القبض، والهبة لا تكون (١) تامة إلا بالقبض. ألا ترى أن رجلًا لو قال لصاحبه: قد وهبت لك هذه الجارية، فقال الموهوبة له: قد قبلتها، وقبضها بمحضر من الواهب والواهب لا يغير عليه أن الهبة جائزة وقبضه جائز؛ لأنه كان أمره بالقبض. (الأصل)