Most of the rules for zakat were written down long before anyone held a stocks and shares ISA. UK households now own cash ISAs, Premium Bonds, workplace pensions and crypto wallets, and each one raises its own question about whether zakat is due. This guide sets out the basic rule, then goes through the common UK holdings one at a time.

It ends with a worked example you can copy. Scholars differ on several points below, so check any unusual situation with someone you trust.

The rule behind every calculation

Zakat is 2.5% of your zakatable wealth, once that wealth has stayed above the nisab for a full lunar year. The nisab is the minimum threshold, set at 87.48 grams of gold or 612.36 grams of silver. Silver gives a much lower figure, which is why some scholars and charities prefer it.

Pick one date each year, such as the first day of Ramadan, and value everything on that day. Metal prices move daily, so check the current nisab on your chosen date. The zakat calculator does the arithmetic once you enter your balances.

Cash, current accounts and cash ISAs

Count every pound in current accounts, savings accounts, cash ISAs and cash kept at home. Use the balance on your chosen date, not an average across the year.

Stocks and shares ISAs

Shares held to sell at a profit are generally valued at market price on your date, then zakat is 2.5% of that value. For long-term holdings, some scholars allow zakat only on the share of the company's assets that are themselves zakatable, which gives a smaller figure. Choose one method and apply it every year.

Premium Bonds

Premium Bonds pay prizes in place of interest, and most scholars who allow them count the invested balance as cash. Some scholars have reservations about the product itself, so ask about permissibility as well as zakat. Any prize you receive joins your wealth from the day it arrives.

Pensions

Opinion splits most on pensions. One common view is that zakat falls due only on money you can actually withdraw, so a workplace pension you cannot yet access is left out until you can. The minimum age for most UK pension access is 55 and rises to 57 on 6 April 2028.

Other scholars count the accessible portion every year. Settle on one position with your scholar and keep to it.

Property

Your main home is exempt. Property bought to resell counts at market value. A buy-to-let flat is generally treated as a source of income, so zakat applies to the rent you have saved and not to the building itself.

Crypto

Many contemporary scholars treat crypto as a trading asset, so zakat is 2.5% of its market value on your date. Decide first whether the specific coin you hold is permissible, because that question comes before the zakat question.

What you can deduct

Subtract debts that fall due within the year, such as credit card balances, overdrafts and unpaid bills. For a mortgage, many scholars deduct only the instalments due over the next twelve months and not the full balance.

Gold, silver and jewellery

The Hanafi school counts gold and silver jewellery towards zakat even when it is worn. The Shafi'i, Maliki and Hanbali schools generally exempt jewellery worn regularly for adornment, while jewellery kept as an investment counts under every school.

Weigh the metal, value it at the current price and add it to your total if your school requires it.

Savings held for children

Many scholars hold that zakat is due on a child's own savings, paid by the parent or guardian from the child's money, while others take a different view. Junior ISAs are usually inaccessible until the child turns 18, so some scholars treat them like a locked pension. Ask your scholar and apply the same ruling each year.

Common mistakes

•       Using an average balance when the rule asks for the balance on one date.

•       Forgetting small accounts, such as an old savings account or a PayPal balance.

•       Counting the full mortgage as a debt.

•       Skipping a year after a drop in income without checking whether wealth still exceeds the nisab.

•       Giving zakat to relatives you are already required to support, such as parents or children.

Paying in parts

You may pay in instalments across the year, as long as the full amount is covered by the due date. Some households set a monthly standing order equal to one twelfth of last year's figure and top up after the new calculation. Keep a note of the date, the figure and what you paid, since the record saves time next year.

A worked example

Amina is a nurse who commutes from Dartford to a London hospital. On the first day of Ramadan she holds £8,000 in a cash ISA, £3,000 in her current account, £2,000 in crypto and £1,000 in Premium Bonds. She owes £3,000 on a credit card.

Her assets total £14,000, and after the card balance her zakatable wealth is £11,000. That is above the silver nisab, so she pays 2.5% of £11,000, which is £275.

Where to give it

Zakat can go only to the eight categories the Quran names, which include the poor, the needy and people in debt. Giving through a charity saves you from finding eligible recipients yourself. You can pay your zakat with United Muslims, which states a 100% donation policy under which administration is funded separately from donations.