Kate Johnson
- Partner
- Private Client
Partner and Senior Manager author article on Zakat, trusts and UK tax
Private Client Partner Kate Johnson and Senior Tax and Trust Manager Shafaq Sadiq have written an article for Taxation exploring exploring the intersection of Zakat, trusts and UK tax, and the legal complexities involved in modern wealth planning.
This article explores how Zakat, as a core charitable obligation in Islam, interacts with UK tax rules, trusts and modern wealth planning structures. While Zakat has clear religious principles, requiring a 2.5% annual contribution from qualifying wealth, its treatment under the UK legal and tax framework is less straightforward.
Kate and Shafaq examine the key areas of complexity, including how Zakat aligns with UK charity law, the implications for inheritance tax, capital gains tax and income tax, and the challenges that can arise when using trust and estate planning structures. The article highlights that, although Zakat does not automatically benefit from UK tax reliefs, careful structuring, including the use of UK-registered charities and donor advised funds, can help achieve both compliance and tax efficiency.
They also consider how differences between Sharia principles and English law can affect ownership, control and distribution of assets, particularly in succession planning. With thoughtful integration of legal, tax and religious advice, individuals can ensure their Zakat obligations are fulfilled effectively while optimising their overall wealth planning strategy.
Read the full article in Taxation here [£].
Meet the team:
Shafaq Sadiq
- Senior Tax and Trust Manager
- Private Client
