And do good that perhaps you may be prosperous.

Subject: Compensating for what a deceased missed in prayer, fasting, and zakat
Fatwa Number: 3281
Date: 09.03.2017 CE
Classification: Wills and Legal Obligations (fara’id)
Type of Fatwa: Research-based
Mufti: Fatwa Committee

Question: My father passed away, and he did not perform the prayer, did not give zakat on his wealth, nor did he fast. His wealth was deposited in an interest-based bank. What are our obligations regarding our father?

Answer: Praise be to God, and peace and blessings be upon our Master, the Messenger of God ﷺ.
The person who neglects prayer, fasting, zakat, and Hajj has committed a grave sin, and his standing before God on the Day of Judgment will be difficult. These are the pillars of Islam; whoever upholds them upholds Islam, and whoever abandons them destroys his religion. However, God’s mercy is vast, and supplication and compensatory acts are a means to attain His mercy, with His permission.
As for the prayer, it cannot be compensated for because it is a purely physical act of worship, and there is no evidence in the Shari’ah that the prayer of a deceased person may be made up, in contrast to fasting and Hajj. However, it is recommended that one increase supplications for the deceased and give charity on his behalf, hoping that God may forgive him or lessen his sin.
As for zakat, it remains due upon the deceased’s estate, even after his death, because it is a right owed to the poor and does not expire with death. In fact, zakat takes precedence over the debts owed to other individuals. As Al-Shirbini said: ‘If zakat and a debt to another person are both present, and the estate is insufficient to cover both, zakat takes precedence’ [Mughni Al-Muhtaj 2/126].
Fasting and Hajj may be compensated for the deceased. As for Hajj, the funds from the deceased’s estate may be used to perform Hajj on his behalf, as narrated by Al-Bukhari in his Sahih on the authority of Ibn Abbas , who reported that a woman from the tribe of Juhayna came to the Prophet ﷺ and said: ‘My mother made a vow to perform Hajj but did not do so and she passed away. Should I perform Hajj on her behalf?’ The Prophet ﷺ replied: ‘Yes, perform Hajj on her behalf. If your mother had a debt, would you not pay it off? So, pay the debt owed to God, for God is more deserving of having His debts fulfilled.’
As for fasting, if someone missed fasting in Ramadan and did not make up for it before his death, it becomes obligatory upon his heirs to compensate for the missed fasts. This can be done by giving—from the deceased’s estate—food for each missed day (equivalent to one madd of food) or by fasting on his behalf. The Prophet ﷺ said: ‘Whoever dies and has fasts left unfulfilled, his guardian should fast on his behalf.’ He ﷺ also said: ‘Whoever dies and has missed a month of fasting, let his heirs feed a poor person for every day missed’ [Sunan Al-Tirmidhi].
As for wealth inherited from the deceased, the original wealth is lawful, and there is no harm in the heirs taking it. However, any profit derived from interest (usury) over the principal sum is unlawful. This interest must be disposed of by donating it to the poor and needy. And God knows best.

Subject: Detailing the zakat on shares
Fatwa Number: 3279
Date: 22.02.2017 CE
Category: Companies and Shares
Type of Fatwa: Research-based
Mufti: Fatwa Committee

Question: Please clarify the method of paying zakat on shares for a trader or a long-term investor.

Answer: Praise be to God, and peace and blessings be upon our Master, the Messenger of God ﷺ.
Zakat is obligatory on wealth, whether it is in the form of money, trade goods, or shares in a company. Shares represent a common share in the ownership of a company one has invested in. Thus, if someone purchases shares with the intention of speculation (muḍarabah), they are required to pay zakat on them as trade goods, as they are considered an investment stake in the company. At the end of every hawl (lunar year), the value of the shares is assessed at their market value and 2.5% of the value is due as zakat.
However, if the shares are purchased with the intention of receiving annual returns, which is known as long-term investment, then the person is required to pay zakat on the annual profits. This does not exempt them from paying zakat on the principal value of their shares, because a share is a common stake in ownership. The company may include fixed assets, cash, and outstanding debts. Therefore, the investor must, as much as possible, determine what part of the company’s assets corresponds to his shares, such as cash, debts, or trade goods, if they exist, and then add that to the annual profits—the total amount of which he will then pat zakat on at a rate of 2.5%.
If the company is in a state of significant insolvency, where its debts exceed its assets, and the investor did not intend to speculate on the shares, zakat would not be due, as there would be no assets or profits on which zakat is due.
The Islamic Fiqh Academy stated in its 13th session: If a company possesses assets upon which zakat is due, such as money, trade goods, or debts owed by solvent debtors, and it has not paid zakat on its wealth, and the shareholder is unable to determine from the company’s financial accounts what portion of its assets corresponds to his shares, then the shareholder must make the effort, as much as possible, to ascertain the assets on which zakat is due that correspond to the original value of his shares. This is unless the company is in a state of severe insolvency, where its debts exceed its assets. However, if the company has no assets on which zakat is due, then Resolution No. 28 (3/4) applies, which means that the shareholder is only required to pay zakat on the dividends (riyʿ), and is not obligated to pay zakat on the principal value of the shares. And God knows best.