Source: http://qa.muftisays.com/?8330
Question ID: #8330
 
Question: Zakat on a loan given

As salam alaikum

I had received inheritance upon my mothers passing 20 months ago. My father who is in debt and has an interest bond asked me to lend him the money to pay off the bond, and he will pay me back at a later stage in the future. I had lent him 450k zar.

Instead of using the money to pay off the bond, my father instead used it to trade in stock markets and has lost all the money as well as other peoples. He currently owes millions in debt and still has the bond to repay. I highly doubt that he has the capacity to repay me at this point in time.

I enquire if i have to repay zakat on this loan given? I have personally lost my job a few months ago and will have to sell off personal items if I am to pay zakat on this loan. I dont know if I will be payed any time soon, perhaps many years in the future. Am I to indefinetely pay zakat on this loan given for years to come until my father finally repays me? Should I write this off as bad debt?

Is it still bad debt even if i have expectation of one day, years in the future, he might repay me? If written off as bad debt and I do get repayed one day in the future, do I need to pay zakat on the missed years?

I humbly ask for advice.

Jazakallah
 
 
Answered by: Ulamaa ID 04 (London)
Date: 10/04/2023 15:26pm

بسم الله الرحمن الرحيم

الجواب حامداومصليا

If there is less or no hope of repayment of the loan then in such a case you pay Zakat on whatever you receive that reaches the Nisab rate and you don’t need to pay for the previous years Zakat.

ومتمسكي فيه وما فيه ردالمحتار بعد نقل عبارة النهر عن الخانية قوله قلت وقدمنا أول الزكوة إختلاف التصحيح فيه ومال الرحمتي إلي هذا وقال بل في زماننا يقر المديون بالدين وبملاته ولا يقدر الدين علي تخليصه منه فهو بمنزلة العدم
(الدرالمختارمع ردالمحتار ٢/٣٤٤،سعيد)
(امداد الفتاوي جديد ٣/٥٨٦)


And Allah knows best

15 Ramadan 1444/ 06 April 2023
Mufti Qamruzzaman

London, UK
 
www.MuftiSays.com