apologies for the slightly messy essay of a question. jazakallahu khayran shaykh.
I buy £600 worth of shares
I made a return of £400 so now i have £1000 of it (40% is profit)
I sell £50 worth and leave £950 still invested
(I assume that this specific company has exactly 5% income from Haram activities)
- To purify, do I:
a) calculate 5% of the amount I actually sold (i.e. 5% of £50 = £2.50)
b) assume that because 40% of my investment is profit, I only need to purify the 5% from the profit proportion (i.e £50 x 40% x 5% = £1) and not consider purifying the 60% initial investment
c) or otherwise?
(a simpler way of asking is, do i purify the gains only, or the initial investment + gains)
- On timings, shall I:
a) purify only once I sell a share? Then what if I intend to hold a share for decades and that 5% (or under) accumulates. Do i just do 1 large purification only then?
b) purify when my zakat hawl is up
c) purify whenever theres a financial report released? Then I’d have to either liquidate some of it or pay out of my (another) pocket, plus it seems a bit unfair to purify on profit I haven’t liquidated yet as it could later fall below the initial cost price and I’ve paid that money despite actually making a loss
(and what about if i sell some shares of a company and hold on to some of it long term?)
- how do i practically determine the % to purify? i took the IFG’s spreadsheet which lists EasyJet as compliant, which means a max of 5% is from haram income, but that doesn’t necessarily mean it is 5%. it could be much lower, and i wouldn’t need to give away 5% unnecessarily.
jazakallahu khayran for your response and apologies again for the length and potentially opening a can of worms and follow-up questions