The question is vague but I will assume that you want to know how to differentiate between long-term/ short-term investments in relation to Zakat.

There is no technical definition of any of them from a shariah perspective.

However, to help people understand, we use these terms to differentiate between the 2 different types of assets classes i.e. those that are bought to generate an income (which in general are bought for a long- term period) and those bought for the purpose of capital growth (which in general are bought for a shorter-term period).

Otherwise the principles behind the Zakat calculation is that:

- the value of anything bought for the purpose of resell or capital growth is subject to Zakat.

This is in contrast with:

- an asset which has been bought for the purpose of generating an income only. The value of such asset will not be Zakatable.

And Allah knows best!

Mufti Billal Omarjee

There is no technical definition of any of them from a shariah perspective.

However, to help people understand, we use these terms to differentiate between the 2 different types of assets classes i.e. those that are bought to generate an income (which in general are bought for a long- term period) and those bought for the purpose of capital growth (which in general are bought for a shorter-term period).

Otherwise the principles behind the Zakat calculation is that:

- the value of anything bought for the purpose of resell or capital growth is subject to Zakat.

This is in contrast with:

- an asset which has been bought for the purpose of generating an income only. The value of such asset will not be Zakatable.

And Allah knows best!

Mufti Billal Omarjee

Published on: 12 / 04 / 2018