Q. "Instead
of our managing a portfolio of ahares, we have invested some spare cash
in some trust funds i.e. private ones and also those set up by the government.
The price of the fund is closely linked with the index of quoted shares
and the price is given each day. Dividends are also declared and given
each year.
Do we have to treat this as cash and pay zakah on its market value or
only on its dividents? In this case the dividends should be enough to
cove rfor the zakah of 2.5 % of total market value, therefore, it would
not cause undue hardship as we do not have to sell the capital portion
to pay the zakah."
(Ibid)
A. A"Trust Fund" is a mutual fund where a portfolio of
the shares of different listed companies is maintained. The share of a
participant in such a fund is represented by a negotiable instrument usually
called a 'unit'. These 'units' represent their holders' proportionate
share in the portfolio, and ultimately a proportionate share in different
companies, as well as a proportionate share in the capital gain the portfolio
earns. Thus, a unit of a "Trust Fund" does not represent cash
only, like the bonds, but it represents a proportionate share in the assets
of the relevent companies also.
Therefore, it will be treated like a share of a quoted company for the
purpose of Zakah, and all the rules mentioned with regard to the shares
of a company are also applicable to the 'units' of a Trust Fund. Therefore,
zakah will be payable on the market value of the such units, irrespective
of the amount of divident declared on them. It is like the stock in trade
on which zakah is payable on the basis of its market value, irrespective
of the rate of profit earned on it.
|