Dividends from a non-Shariah compliant investment

Answered according to Hanafi Fiqh by Muftionline.co.za

Q: A person has an investment in a unit trust from the 1970’s. The unit trust was not shariah compliant, and thus included investments in alcohol/gambling based companies, interest based financial institutions, as well as ordinary companies.

1. Is it permissible to utilise dividends received from the unit trust to pay income tax for a business?

2. Is it permissible to offset these dividends received from the unit trust against income tax that is deducted from a persons salary by his employer? If this is permissible, can it be offset against amounts deducted for income tax in previous years (as the dividends were already received then, and tax deducted then), or would it only be permissible going forward (as dividends are received and income tax deducted)?


A: Give it in charity.

And Allah Ta’ala (الله تعالى) knows best.


Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)