Shariah Wills and Inheritance Tax Planning

“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)

Under the Sharia a Muslim with wealth is under a duty to write a Will and he/she should not let three days pass without executing a Will. In order to fulfil your religious obligation, it is important for Muslims to execute a Sharia Compliant Will and not simply a secular Will.

The basic rule is that at least two thirds of a deceased Muslim’s estate must be distributed amongst surviving relatives in fixed shares as prescribed by the Quaran.

Up to one third of a Muslim’s estate can be bequeathed to anyone in a Will who is not entitled to a fixed share, such as a charity. Muslims may wish to leave a “Sadaqah Jariya” (which is a type of perpetual charitable giving in the cause of Allah) and Muslims believe that they can reap the rewards for this beyond the grave.

Under an Islamic Will Muslims can also:

1. Appoint Executors (a friend, relative or lawyer) to handle their estate after they have died;
2. Appoint guardians of any minor children;
3. Make provisions for any minor children i.e. to invest their inheritance for their maintenance, education or benefit. This can be invested in Sharia compliant trusts;
4. Specify who they would like their ’up to one third bequests’ to go to;
5. Specify any charities they may wish to benefit; and
6. Specify any funeral wishes. Muslims must be buried and their bodies should not be subject to a post mortem in accordance to the Sharia.

Shariah Wills and English Law

It is important to ensure that not only does a Sharia Compliant Will adhere to the principles of Islam but it is also tax efficient and compliant with the laws of England and Wales. Planning ahead is key to preserving your assets and mitigating tax and our team can help you by guiding you through the ever increasing amount of tax legislation and work out the best way forward for you and your family.

‘Home-made’ Wills or those not drafted by qualified professionals may fail to consider all the legal issues surrounding each particular circumstance and in the worst case scenario a poorly drafted Will may not have any legal effect. Dying without a Sharia Compliant Will may render your estate difficult to administer, complicated and expensive.

Contact JMW

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 Sharia Compliant tax adviser today on 0845 872 6666 for a no obligation discussion. Alternatively, please complete our online enquiry form and one of the team will be happy to advise you.