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Gold, silver & jewellery

Q1)

Are gold ornaments, gems / jewelled pieces of high value to be counted in the calculation of Zakat?

There are varying degrees of interpretation however the position of the National Zakat Foundation on this matter is that one should pay Zakat on gold and silver jewellery but not on jewellery/ornaments made from other precious materials, e.g. diamonds, pearls etc.Allah knows best.

Q2)

Are other precious metals such as platinum & palladium to be included when calculating Zakat payments? Furthermore, when weighing gold & silver, is the total weight of both combined taken into account or are they both separate due to the nature of the different values?

There is no Zakat due on platinum and palladium or other precious metals apart from gold and silver.

Gold and silver should be weighed separately - on our calculator if you enter the weights of gold and silver in grams then the calculator automatically works out their current value.

Q3)

Can you tell me if I have to pay Zakat on silver which is worn on a daily basis for e.g my wife's wedding ring?

Zakat is personal obligation. Every person is primarily required to pay their own Zakat. Hence, your wife will be primarily responsible to pay Zakat on her Zakatable assets such as gold and silver. However, you may pay Zakat on her behalf. A silver ring is subject to Zakat.

Q4)

Do I add the money in my bank account with the value of my gold jewellery (which is not used) or do I pay them separately?

For example: Is it: A) 2.5% of Money + value of gold OR B) 2.5% of Money + 2.5% of value of gold - each with its own Nisab and Hawl?

Please add them together and compare to the silver Nisab.

The National Zakat Foundation adopts the opinion that if someone possesses gold only then they should use the gold Nisab, but if there is a mix of assets then they should use the silver Nisab

Q5)

Please can you clarify this issue for me? Do I pay Zakat if I purchased my gold jewellery with the intention of just wearing it as an adornment? If my intention was to buy gold jewellery for investment purposes then does this attracts Zakat?

You have come across what has been a valid difference of opinion amongst scholars for centuries!

The Hanafi view is that all gold and silver, whether used or unused, and in whatever format, is all subject to Zakat. They hold that gold and silver are intrinsically subject to Zakat. This is a well-founded view and is of course the safest option when calculating one's Zakat.

The view of the majority of scholars however is that gold and silver jewellery bought for personal use are exempt from Zakat. They equate such items to one's other personal possessions, like clothing for example, that are not subject to Zakat of course.

So what should one do in this situation?

Either one follows one school of thought or one trusted scholar for ALL aspects of the Zakat calculation, or one follows the safest view in each area of contention, such that one's Zakat is maximised and one has absolute certainty that the duty has been fulfilled. Either of these approaches would be acceptable. The approach that would be problematic is if someone starts to pick and choose different views from different schools of thought for different elements of the Zakat calculation.

Q6)

Do I have to pay Zakat on my gold for the last five years and if I need to pay Zakat, how would I calculate this as the value of gold fluctuates. I have 355g of gold which I acquired on 11/7/2008. Could you please let me know how to calculate the historical value of gold?

Whether you have to pay for the last five years or not depends on why you didn't pay it. If you didn't pay because you researched the issue and took the opinion of a scholar who said that you don't have to pay Zakat on the gold if you wear it then you don't have to pay anything for previous years. However, if you didn't pay simply because you didn't consider it or just decided it wasn't subject to Zakat then you should pay for previous years.

The approximate value of 355g of gold during Ramadan since 2008 is as follows (based on live gold price at the time):

2014 (current): £9,300
2013: £9,400
2012: £11,430
2011: £13,060
2010: £8,800
2009: £7,100
2008: £6,250

So the total Zakat due for each year would be

2014 (current): £232.50
2013: £235
2012: £285.75
2011: £326.50
2010: £220
2009: £177.50
2008: £156.25

GRAND TOTAL (including this year): £1633.50

Q7)

When weighing gold & silver, is the total weight of both combined taken into account or are they both separate due to the nature of the different values?

Gold and silver should be weighed separately - on our calculator if you enter the weights of gold and silver in grams then the calculator automatically works out their current value.

Q8)

Usually I calculate my Zakat in June each year. Our marriage will be coming to an end very soon. Is it permissible to wait for our separation and then calculate the annual Zakat? Or should I calculate it now, as she is still currently my wife?

I am sorry to hear of your circumstances, may Allah make it easy for you.

In terms of your Zakat calculation, you should proceed as normal and not consider the fact that you may be going through a divorce. However, you should be aware that it is not your responsibility to pay Zakat for all the gold that you and your wife have. The question is, how much of the gold is really your wife's and how much of it is yours? If, as would be expected, the gold is the property of your wife, then it is her responsibility to pay Zakat on it. If she does not have the necessary cash, then she should sell some gold to be able to pay the relevant amount of Zakat.

If you consider the gold to be jointly and equally owned, then you should pay Zakat for your half and she should pay for her half.

Q9)

How much Zakat is payable on 20 tolas of gold and 30 tolas of gold please?

20 tolas of gold = 256.60 grams. Zakat due would be on 2.5%, so 6.42 grams which equates to £174.75 currently.

30 tolas of gold = 384.90 grams. Zakat due would be on 2.5%, so 9.62 grams which equates to £261.92 currently. Please check current gold prices www.bullionbypost.co.uk

Q10)

What if your gold jewellery is made up of different materials?

Where gold has been mixed with other materials (eg. lower carat pieces), Zakat need only be calculated on the portion of the item that is made from gold. It is not just gold jewellery that needs to be accounted for, remember to enter in the weight of gold ornaments/decorative items etc.

Q11)

Do men need to pay for Zakat on gold?

Even though men are prohibited from wearing gold jewellery, if a man possesses a gold watch for example, then Zakat should still be paid on that watch. Remember Zakat is not due on jewellery made of platinum, pearls or any other precious metals.

Q12)

How do you convert your gold from Bhoris, Tolas and Voris into grams?

One Tola or Bori or Vori is equivalent to 11.66 grams.

We know that the Nisab threshold for gold is 87.48 grams, so this is be equivalent to 7.2 Tolas, Voris or Bhoris. Please check current gold prices www.bullionbypost.co.uk

Q13)

How is the Gold Nisab calculated?

This is where some people find Zakat calculation gets a bit tricky, but it’s easy when you know what you’re doing and get a bit more of an understanding of the topic at hand!

‘Nisab’ is the minimum amount of wealth you have (in terms of disposable income) on which you HAVE to pay Zakat on. Once your wealth exceeds the Nisab threshold, it is mandatory that you pay 2.5% Zakat on your total wealth. If your wealth does not reach – or exceed – the Nisab threshold, you are not obliged to pay Zakat.

Not too difficult right?! Now, let’s talk about what the value of Nisab actually is...

  • 87.48 grams of gold (based on Ijma reported by Imam Malik, Imam Ash-Shafi'i and others)
  • 612.36 grams of silver (based on hadith reported by Al-Bukhari, Ahmad, Abu Dawud, and others)

In today’s day and age, we do not use silver and gold as an monetary exchange, so when calculating your Zakat, you need to find out the equivalent of the rates the Prophet (peace be upon him) set but in your local currency. This can be done by checking the market rate today via bullionbypost.co.uk

Q14)

How is the silver Nisab calculated?

This is where some people find Zakat calculation gets a bit tricky, but it’s easy when you know what you’re doing and get a bit more of an understanding of the topic at hand!

‘Nisab’ is the minimum amount of wealth you have (in terms of disposable income) on which you HAVE to pay Zakat on. Once your wealth exceeds the Nisab threshold, it is mandatory that you pay 2.5% Zakat on your total wealth. If your wealth does not reach – or exceed – the Nisab threshold, you are not obliged to pay Zakat.

Not too difficult right?! Now, let’s talk about what the value of Nisab actually is...

  • 87.48 grams of gold (based on Ijma reported by Imam Malik, Imam Ash-Shafi'i and others)
  • 612.36 grams of silver (based on hadith reported by Al-Bukhari, Ahmad, Abu Dawud, and others)

In today’s day and age, we do not use silver and gold as an monetary exchange, so when calculating your Zakat, you need to find out the equivalent of the rates the Prophet (peace be upon him) set but in your local currency. This can be done by checking the market rate today via bullionbypost.co.uk

Q15)

What if the silver is mixed with other materials?

Note that for silver alloy items (i.e. where there is a mixture of silver with other metals), Zakat is only due on the proportion that contains silver. Please only enter the best estimate of the weight of silver in your jewellery. No doubt, the safest way to avoid underpayment of Zakat is to enter the total weight of silver jewellery. Don’t forget to enter the value of any silver items held in other forms.

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