CALCULATING ZAKAT ON SHARES
Zakat on Shares relates to investment tools comprising stocks, shares, ETFs, REITs, and others.
A share is a divided-up unit of the value of a company. If a company is worth $100 million and there are 50 million shares in issue, then each share is worth $2.
A company’s shareholder is a partner in ownership of the company in accordance with the amount of shares he owns in the company.
Unlike Zakat on Savings which takes the lowest value of savings during the Haul period that has reached the Nisab, Zakat on Shares is 2.5% the market value of the shares at end of the Haul or financial year period. This is because shares fluctuate in value more rapidly.