Gold Prices in the UK and Zakat over Gold Wealth
Zakat is one of the five central pillars of Islam. It has to be offered once during the Islamic year. This implies that you have to mark one day each year to determine your Zakat of all the assets you have amassed over the year. Gold prices in the UK is one of an article for your zakat calculation for your Ramadan 2022 zakat givings.
It is not uncommon for many Muslims to mark the commencement of Ramadan as the time of giving Zakat.
But to calculate your Zakat, you first need to ascertain if you are a Sahib-e-Nisab. Zakat is an obligation only on those Muslims who have more than the required amount of savings and goods. Once you have determined whether you are eligible to pay Zakat, you can calculate it accordingly.
Are You Eligible for Paying Zakat?
Nisab is based on the trading rate of gold or silver in your local currency. You are a Sahib-e-Nisab, and you are eligible to pay Zakat if the sum of your goods corresponds to, or is more than 7.5 tola / 3 ounces / 87.48 grams of gold, or 52.5 / 21 / 612.36 grams of silver for an entire year.
Since gold and silver can be used as a currency in today’s world, it is necessary to change Nisab into your local currency based on the current value of gold or silver on the estimation day.
Please note that we will use Pakistani Rupees (PKR) as the default currency in our examples to show how to calculate Zakat in Pakistan. However, all prices and amounts will fluctuate depending on when you determine your Zakat and in which country.
- Gold and silver Nisab calculation formula in Pakistan
Assuming you are counting your Zakat on the day when the gold standard in Pakistan is PKR 96,400 per tola. So:
PKR 96,400 * 7.5 tola = PKR 723,000
On the other hand, if you use silver to calculate Nisab and assume that the average silver price in Pakistan for that day is PKR 1,456 per tonne. So:
PKR 1,456 * 52.5 tola = PKR 76,440
So, this means that if you calculate your Zakat with Nisab gold and have more than PKR 723,000 as your savings and assets for the entire year, you are qualified to pay Zakat on them. Alternatively, you will have to pay Zakat on goods and savings for a full year of the month if it reaches PKR 76,440 based on Nisab silver.
The crucial thing to note here is that your cumulative amount should be above Nisab for a full lunar year. If your assets fall under PKR 76,440 (for example) during the month, your new year will start again when you are over Nisab again, and the start date on the Islamic calendar should be the day of reckoning Zakat a year later. In contrast, if you are a Sahib-e-Nisab all year round, it is up to you to choose one day a year to determine your wealth, but as mentioned above, many people prefer the month of Ramadan for this act of philanthropy.
Which Nisab Should You Choose? Gold or Silver?
Now the question is – which Nisab should you choose? Although silver Nisab is considered Afzal or very beneficial, both for the recipient and donor, as additional Zakat is given due to the lower limit, there is a way to decide which Nisab should be used.
Generally, if you only have assets and savings in gold, that is the Nisab you should use. However, if you have savings and silver or mixed goods, including cash, gold, silver, and other commodities, it is best to use Nisab silver.
Please note that different religious groups may differ in their views on which Nisab to follow, and if in doubt, it is best to seek advice from an Aalim-e-Deen of your sect.
Calculating Zakat in 2022 – Gold prices in the UK
Determining Your Zakat is easy once you have listed your assets. So, count Nisab and find out if you are eligible to pay Zakat 2022. Although Zakat calculators are available online, many of them will not show you how to calculate Zakat for a specific year. On the contrary, we will take you through a step-by-step process to help you understand how Zakat is calculated for gold and all your other assets for one year.
First of all, remember that Zakat applies to savings and excess goods for personal use. Therefore, your house, clothes, car, electrical appliances, and other things you use every day are not included in the Zakat calculation.
Assets to Include
- Money, whether at home or in a bank
- Owned foreign currency (an amount equal to the local currency conversion rate)
- Savings for a specific purpose, such as Hajj, wedding, car purchase, etc.
- The value of all the gold and silver you own in local currency
- The market value of any shares you may own if you wish to sell them
- Profits from stocks if you do not sell them soon
- The money you are owed and which will also be repaid soon
- Business owners should also include a balance sheet amount for ownership stocks
- Landlords should put on the table any leased savings
- If a property is purchased as an investment to be sold, it means that you should include its market value
- Expected profit from the sale of investment property soon
Updated Gold Prices in the UK
As of 24th November 2021, the UK’s spot price for 1 gram of gold is £43.20. However, these prices are subject to changes daily.
Updated Zakat Calculator by Transparent Hands
You can also use an online zakat calculator for this purpose. Transparent Hands zakat calculator is an excellent choice that you can consider in this regard.
Why do we ask you to opt for the Transparent Hands zakat calculator? Well, there are multiple reasons behind this recommendation of ours.
- Features a simple interface
- It is easy to use
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