Zakat on Stocks & Shares UK 2026
Stocks, shares, ISAs, mutual funds, and ETFs are all zakatable at 2.5% of their current market value on your Hawl date. The ISA tax wrapper is irrelevant to your Islamic obligation.
How to calculate Zakat on shares
Shares you hold in publicly listed companies are zakatable at 2.5% of their current market value on your Hawl date — the number of shares multiplied by the current share price.
There is scholarly disagreement about whether to calculate Zakat on:
- Market value (widely accepted practical approach): 2.5% of total market value of your portfolio.
- Zakatable assets method (more precise, scholarly preferred): Calculate the zakatable portion of the company's assets (cash, receivables, stock) per share and apply 2.5% to that figure only. This is complex and usually done using published annual accounts. Most individual investors use market value.
For the majority of UK Muslims investing through platforms like Vanguard, Hargreaves Lansdown, or Trading 212, the market value approach at 2.5% is the accepted and practical standard.
ISA accounts and Zakat
An ISA (Individual Savings Account) is simply a tax-exempt wrapper. The wrapper does not change the Islamic nature of the underlying wealth.
| ISA type | Zakat treatment | What to enter in calculator |
|---|---|---|
| Cash ISA | Zakatable as savings | Cash & Savings field |
| Stocks & Shares ISA | Zakatable at market value | Stocks & Investments field |
| Lifetime ISA (LISA) | Zakatable at current value | Stocks or Cash field |
| Junior ISA | Child's wealth — parent pays if below Nisab age | Include in household total |
Mutual funds, unit trusts, and ETFs
Calculate Zakat on the Net Asset Value (NAV) of your units or ETF shares at your Hawl date. Your investment platform shows this as the current value of your portfolio. Pay 2.5% of that total value.
For Islamic funds (Shariah-compliant ETFs): the same 2.5% rule applies. The fund's compliance with Shariah does not change how Zakat is calculated on the investor's holding.
Worked example — Fatima's investment Zakat
Fatima holds the following on her Hawl date:
- Cash ISA: £4,000
- Stocks & Shares ISA (Vanguard FTSE All-World ETF): current value £11,500
- Savings account: £2,000
- No debts.
Total zakatable wealth: £4,000 + £11,500 + £2,000 = £17,500
Nisab check: £17,500 > £496 ✓
Zakat due: £17,500 × 2.5% = £437.50
Halal investing and Zakat
Whether your investments are halal or not does not affect your Zakat obligation — Zakat is calculated on the wealth you own. If you hold shares in companies that are not Shariah-compliant, you still owe Zakat on those shares' value. You should also look into purification of haram-derived income separately from your Zakat calculation.
Frequently asked questions
How do I calculate Zakat on stocks and shares?
For shares in a publicly traded company, calculate Zakat on the market value of your shares on your Hawl date — multiply the number of shares by the current price per share. The 2.5% rate applies to the full market value. Do not use the purchase price; use what they are worth today.
Is a Stocks and Shares ISA zakatable?
Yes. A Stocks and Shares ISA is a tax-efficient wrapper — the underlying investments (shares, funds, bonds) are zakatable at 2.5% of the current market value. The ISA wrapper has no bearing on the Islamic Zakat obligation.
Is a Cash ISA zakatable?
Yes. A Cash ISA is a savings account with a tax wrapper. The balance is zakatable as cash savings at 2.5% — include it alongside your other savings in the Zakat calculation.
How do I calculate Zakat on mutual funds or unit trusts?
Zakat on a mutual fund is calculated on the current Net Asset Value (NAV) of your units at your Hawl date. Some scholars say you should try to calculate Zakat only on the zakatable portion of the fund's underlying assets (cash, receivables, stock) — but 2.5% of NAV is widely accepted as the practical standard.
What about shares in a private company I own?
For shares in a private business you own or manage, Zakat is calculated on the zakatable assets of the business (trade stock, cash, receivables) — not the company's overall valuation. See our business assets guide for the correct method.
Are dividends zakatable?
Dividends received and sitting in your account on your Hawl date are zakatable as cash. If dividends are automatically reinvested, the increased NAV or additional shares are included in your market-value calculation.