Is zakat obligatory on the profits or on the principal of Islamic sukuk purchased three years ago?

Zakat is obligatory on Islamic sukuk (certificates) if they are intended for trading. They should be valued at their market price at the end of the hawl (one lunar year), and one-quarter of one-tenth (2.5%) of their value must be given as zakat, in addition to the zakat on their profits.

However, if they are intended solely for retention and benefiting from their profits, then zakat is obligatory only on the profit. This is unless there are uninvested cash funds with the entity managing the sukuk, in which case they should be estimated and their zakat paid.

The Islamic Fiqh Academy has affirmed that the ruling on sukuk zakat is similar to the ruling on shares zakat. If the company does not pay zakat on its funds, then the shareholders must pay zakat on their shares. If the shares are intended for benefiting from their returns, then zakat is obligatory on the returns after the hawl has passed. If they are intended for trade, then they are subject to the zakat of trade goods, and 2.5% of their market value and profit must be given.