Zakaat on Al-Mabroor and Mandela Coins
1) How is zakaat to be calculated on the Al Mabroor Buffalo Investment?
2) How much zakaat should I pay for the Mandela R5 coins. I paid a few thousand for them because of their rarity. The coins are still circulation coins. That is, if I go into a shop, they would accept it as a R5(the legal tender value). There is no gold or silver in the coins.
The only difference is that they have been graded by a coin company(to show what condition the coin is in).
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
1. The Al-Mabroor Buffalo Scheme is a Mudarabah partnership agreement with a minimum investment tenure of five years. Investments made towards the Al-Mabroor Buffalo Scheme are for capital gain.
When animals are purchased for capital gain, they will be treated as merchandise. Hence, the laws of zakāt on merchandise will be applicable and not the laws pertaining to zakāt on animals.
Zakāt is obligatory on the current market value on the day of calculating one’s zakāt. For example, a person invested R3 million in the Al Mabroor Buffalo Scheme. On the day of calculating one’s zakāt, the market value of one’s investment is R 3,500,000. If one’s liabilities do not exceed one’s assets, then such a person will be obligated to pay zakāt of 2.5% of R 3,500,000 plus the value of other zakātable assets.
2. In principle, Zakaat is Wajib on legal tender/legal currency. Therefore, Zakaat will be wajib on the actual R5 Mandela Coin and not the value of the Mandela Coin since Mandela Coins are classified as legal tender. For example, one owns 1000 R5 Mandela Coins with the value of each coin being R1000.00. Such a person will be obligated to pay Zakaat on R5000.00 and not on R 100000.00.
And Allah Ta’āla Knows Best
Student Darul Iftaa
Durban, South Africa
Checked and Approved by,
Mufti Ebrahim Desai.