If you run a business, Zakat generally applies to assets held for trade: stock and inventory held for resale (valued at current market selling price), cash held in business accounts, and money owed to the business by customers where repayment is expected. Fixed assets used to run the business — machinery, shop fittings, vehicles, the building itself — are not usually Zakatable, since they are tools for generating income rather than goods held for sale.

Worked example: a small online retailer has £12,000 of stock ready for sale, £3,000 in a business bank account, and is owed £1,000 by customers. Business liabilities due within the year total £2,000. Zakatable business wealth is £12,000 + £3,000 + £1,000 minus £2,000 = £14,000. Zakat due is £14,000 x 2.5% = £350.

Shares and investment funds: shares held for short-term trading are valued at full current market price, like stock. For long-term investment, many scholars say only the Zakatable portion of the underlying company’s assets applies (cash and inventory), rather than the full share value — many Islamic finance bodies publish a simplified estimate, often around 25 to 30% of a fund’s value. Where a fund or platform provides its own Zakat guidance, use that figure.

Pensions: a common approach is that Zakat only becomes due on pension funds once the saver can access the money, since before that point they lack full ownership or control. Once withdrawn, the sum becomes ordinary cash wealth for the next Zakat calculation.

Knowledge check: Are the fixed assets of a business, such as machinery, usually Zakatable? How does the treatment of shares differ between short-term trading and long-term investment? At what point do most scholars say Zakat becomes due on a pension fund?

Model answers: No — they are tools for generating income, not goods held for sale. Short-term trading shares are valued at full market price; long-term investment shares often use only the Zakatable portion of underlying assets (commonly ~25–30% as an estimate). Once the saver can access the money (has full ownership/control).