Khums: Is a Ribā-Free Loan Fund a Legal Entity, and Is Its Profit Subject to Khums?

Practical Laws of Islam as per the teachings of Imam Khamenei

Khums: Is a Ribā-Free Loan Fund a Legal Entity, and Is Its Profit Subject to Khums?

English:

Question #939:

Is a ribā-free loan fund a separate legal entity? If it does, are its profits liable to khums? If it is not a separate legal entity, how is its khums paid?

Answer #939:

If the capital of the fund belongs to individuals who form a partnership, then each shareholder’s profit is considered his personal property and he will be liable to its khums if it exceeds his annual expenditures. However, if the capital of the fund does not belong to a person or persons, e.g. it belongs to a public endowment; the profits are not liable to khums.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Khums