Religious Obligations on a Muslim to write a Will
It is the duty of a Muslim who has anything to bequeath not to let two nights pass without writing a Will about it.” (Sahih al-Bukhari)
The holy month of Ramadan has now passed us, the month of Dhu'l-Hijja is nearly upon us and Muslims should ensure that all of their personal affairs are in order within a Shariah Compliant Will.
The inheritance rules originate from the holy Quran. The ruling is contained in only three versus of the Quran (4:11, 4:12 and 4:176). Two thirds of the estate must pass in accordance to the Quran to prescribed beneficiaries and One third of the estate can pass to other beneficiaries (but not to the prescribed beneficiaries mentioned in the Quran).
DID YOU KNOW
- If you die without a valid Will in England and Wales your estate will be divided according to the law of this country, often referred to as the "intestacy rules”. Family members entitled to your estate will depend on which of your relatives are alive at the date of your death. The intestacy rules are not compliant with the Shariah rulings.
- You could receive benefits beyond the grave by leaving a charitable bequest in your Will (e.g. "Saidiqa Jariya”)
- You can specify funeral wishes in your Will, which adheres to Shariah principles
- You can appoint Muslim Executors to deal with your affairs
- You can ring fence and protect the estate for vulnerable children (e.g. a child going through a divorce or bankruptcy) and still make your Will Shariah Compliant.
- A strict Shariah Compliant Will is not necessarily inheritance tax efficient (and inheritance tax is charged at 40% on death!). There are ways to draft Shariah Compliant Wills which also save inheritance tax.
- If you are domiciled in
India or Pakistan, you could take advantage of the double taxation treaty and be liable for less inheritance tax ! - If you own a business, there may be extra inheritance tax savings to be had, if your business qualifies for "Business Property Relief”.
There is minefield surrounding the laws of inheritance tax and preserving the family estate for future generations. It is important to speak to Tasnim Khalid, our Shariah Compliant tax adviser (also a native Urdu speaker) today on 0161 828 8339 for a no obligation discussion
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