Q. A friend of mine buys building sites. He may keep the site for a year or two, or even longer, then he would build a block of apartments, which he then sells. Is the land liable to zakah during the intervening period, before the building starts? If so, at what value?
Dr. Anwar
A. This man is buying the land to carry out a building project, which is part of his business. He does so for the purpose of making profit. This is all legitimate, but it means that we should look at this whole exercise as a business venture. Should he get an offer for the land that gives him a decent profit, he would most probably sell it without building on it. As such, the land should be treated as a commercial commodity. In this case, it is zakahable every year, on the day when he pays his zakah. The zakah due on it is calculated on the basis of its value on that day.
This is one way of looking at the question. Another way is to treat the land and the building project as capital assets. These are not liable to zakah while they are used to generate income. Thus, when the man has built and starts selling, he pays zakah on each unit he sells, on the day he receives the price. In both cases, the rate is 2.5 percent. In this second method, he continues to pay zakah, on his total zakahable assets, on his normal zakah date.
Which way to choose? The answer depends on the personal circumstances of the individual concerned. If we are talking here about one who runs a flourishing business of buying land and building sites, and who is likely to be in possession of several sites, retaining some while others are being built and sold, then we should take the first option, considering all plots as commercial commodities and paying zakah annually at the current value of each plot. On the other hand, if it is a case of a small business, where the person concerned buys one plot at a time, and has to raise funds to start building, then the second option may be the right one.
Who Inherits First
Q. Could you please give the order in which heirs, in the Islamic system of inheritance, take their shares. Can we say, for example, that the deceased’s parents take their shares first, then the spouse, then the daughters, then the sons, etc.? Who comes next? You have often mentioned in your answers that the estate is to be divided into 24 shares and then we divide these to the heirs. How does this work out? It seems often very difficult. Please explain.
Zainab Anwar
A. The Islamic system of inheritance specifies certain rights that should be met from a person’s estate before any heir can take any portion. The first of these is the expenses of the burial of the deceased. The second claim is the repayment of any debts he left outstanding. The final one is the execution of his will. A Muslim is allowed to bequeath by will a portion of his estate that does not exceed one-third. This goes to any charitable purpose, such as payments to some relatives who are not heirs, some poor neighbors, or the education of poor children, or to a charitable endowment, etc. The Prophet specified that this can be in a portion of one-third, but he added that one-third is plenty, encouraging us to keep it at less than that.
When these claims have been paid out, what is left goes to the heirs of the deceased. These vary according to who of the deceased’s relative has survived him or her. It should be remembered that what counts here is being alive at the moment of the deceased’s death. This means that if an heir, such as a spouse, a child or a parent of the deceased dies only a few minutes later, that heir inherits, and this inheritance is counted among that person’s own estate to be divided among his own heirs. Suppose that a car accident results in the death of a man and his father, but the father dies five minutes or half an hour after the son has died. The father in this case inherits from the son. Suppose that the son is married but has no children, while he has brothers, sisters and mother surviving him. His wife will inherit one-quarter of his estate. One-sixth goes to his mother, and his father takes the rest. Nothing goes to his siblings. They inherit from their father when he dies.
The first claim is that of the first-degree heirs. These inherit together. We cannot say that parents inherit before children, because they are all in the same degree. The first-degree heirs are those in the direct line that goes upward and downward at the same time, so as to include parents and grandparents and great-grandparents as well as children, grandchildren and their children. It also includes the deceased’s spouse. Some of these have specified shares, while others take the remainder, dividing it among themselves according to certain rules. What is important to remember is that in this line, we move one step at a time, with those who are in the closer step to the deceased inheriting but not those in the next step. Thus grandparents do not inherit anything if the deceased’s parents are alive. A grandfather does not inherit from his grandson, unless the grandson’s father (i.e. the grandfather’s son) is dead. Likewise, grandchildren do not inherit if their parents are alive. There are certain additional rules concerning the inheritance of grandchildren. This is logical because Islam lays down a rule making “gain commensurate with responsibility”. A father is responsible for the upbringing of his children. An adult son is duty bound to look after his parents, if they have no income of their own. Therefore, the one with such responsibility inherits so as to be able to discharge his responsibility.
Spouses and parents inherit specified shares, such as one-sixth of the estate for each parent in the case of the deceased being survived by one child or more. What is left goes to the children. If the deceased has daughters only and no sons, his children are given specified shares, such as one-half of the estate for one daughter, and two-thirds for two or more daughters.
Only when there are not enough heirs of the first degree that other relatives may inherit. If a deceased person’s heirs include his father or one son, then no one from the other degrees, such as his brothers and sisters, will inherit anything.
Sometimes we say that the estate is to be divided into 6, 8, 12, 16, 24 shares, or any other number. If I frequently said that it is divided into 24, that was only coincidental to the cases I was treating. Dividing into such numbers of shares depends only on the actual status of the heirs and their relation with the deceased. Each case is treated on its own. There is no rule that defines a number of shares applicable to all cases. With all the different situations that can exist, no formula can have such a universal applicability. Hence, we decide the number in each case according to the heirs and their specified shares. Scholars have always worked on the basis of whole shares to each heir. They do not say, 3.5 shares to this one and 1.75 to his sister. They would rather work on 4 shares to the one and 2 to the other. Hence, the total number of shares always differs.