My question is, on what amount do I pay zakat, baring in mind that I still owe my friend £10,000. I borrowed £10,000 from a friend to buy shares, we made an agreement that I would pay the zakat on the borrowed money, the shares are now worth only £1,000.
Answer
You do not have to pay Zakat on the borrowed amount.
However, as soon as your friend is paid his money, it is necessary for him to pay the Zakaat on the credited amount that was returned by you.
and Allah Ta’ala Knows Best
Mufti Ebrahim Desai