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Oh, for goodness sake.........

More bending over backwards by the hard pressed majority for the not so down trodden big bloody chip on their shoulders minority......

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Muslim families in receipt of Child Trust Fund vouchers are currently unable to use them as the available accounts do not comply with Sharia law. Islamic law forbids all forms of financial interest and has strict rules about the kind of products Muslims can invest in.

And if the industry does not respond to the demand, in a year the Inland Revenue will invest on behalf of these families, against their religion.

However, the Inland Revenue told the BBC it hopes the finance industry will set up a Sharia compliant account as there is nothing in the rules to prevent it from doing so.

The new Child Trust Fund (CTF) will be launched in April, and all parents of children born from 1 September, 2002, are getting at least 250 from the government to invest in special accounts for their child's future.

There are currently 29 CTF accounts available in the UK, with some allowing parents to save in interest-paying cash accounts, and others which invest in shares.

But as Ibrahim Mogra, a Leicester Muslim explained:

"Unfortunately, at the moment there is no CTF where I could invest that money on behalf of my child because the places where the government has recommended are not Sharia compliant."

Ethical investors

Other ethical "The funds are not invested in any tobacco companies, any weapons, arms or nuclear power companies, anything like that. It is the only ethical stakeholder CTF."

However, the lack of choice concerns Scott McAusland from EIRIS, the Ethical Investment Research Service. He told Money Box:

"It is important there are more funds that match the principals and views of the investors, of the parents who are investing on behalf of their children, which match the aspirations they have for their children and the sort of world in which their children will grow up."

'Friendly' funds

Investors' money from the CIS Child Trust Fund will be channelled into the CIS FTSE4 Good Tracker Trust with performance linked to the FTSE4Good UK share index.

Jeremy Batstone, director of research for Charles Stanley Stockbrokers, explained:

It is essentially an index made up of those companies regarded as being ethically or environmentally-friendly.

"It is not the same as the main FTSE 100 index as that comprises of certain companies that under certain criteria might not make ethically or environmentally-friendly portfolios."

But this fund is not suitable for Muslims, as Faysal Sattar of Britain's only firm of Muslim financial advisers, 1st Ethical, explained.

He said the CIS Child Trust Fund and FTSE4GOOD Index are not Sharia compliant because they are not strict enough in the firms they invest in.

However, Mr Sattar is hopeful the situation will change.

He is a member of the Muslim Council of Britain's economic steering committee which advises the government on such matters, and he told the programme:

"We are hoping we can bring this matter up and try to think about a fund that will be able to cater for the Muslim community."

Reply to
Layezee
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Let them set one up if they are so bothered about it.

Reply to
Tumbleweed

In message , Tumbleweed writes

I would have thought that there would already be a Muslim bank of some kind?

Reply to
Richard Faulkner

........................................................................................................................ If they don't like it tough!!! Nobody forces them (or anyone else of any religion) to open an account. If they can do without then it is a great saving to all of us taxpayers. Eric

Reply to
Eric Jones

Other than HSBC, which does have some Shira compliant accounts, not really.

Reply to
Jonathan Bryce

In message , Richard Faulkner writes

You are right.

HSBC offer 'Amanah Home Finance'

Ahil United Bank (UK) plc

Both of these offer home purchase schemes in which no interest is charged. I am sure somebody will come up with something.

Reply to
john boyle

Presumably HSBC are approved by the government for the scheme, so what's the problem?

And what do Muslims, (who follow the rules), do with their money if they cant have a bank account?

Keep it in notes in the house?

Reply to
Richard Faulkner

In message , john boyle writes

Is this where the bank buys the house and then sells it at a higher price? In effect, charging all of the "interest" up front.

Reply to
Richard Faulkner

In message , Richard Faulkner writes

Yes, I think that is how it works.

Reply to
john boyle

They can have a bank account, but not one that pays or charges a fixed rate of interest. Fixed in this context includes what we call variable.

Reply to
Jonathan Bryce

I think it is more like buying the house on Hire Purchase.

Reply to
Jonathan Bryce

I understood that the bank buys the proportion of the house that the buyer cannot afford and then sells it to them in monthly installments, and at the same time charges them rent for using the proportion of the house that the bank owns.

Reply to
rob.

I think it is just that they cannot pay or receive interest fort lening of borrowing money.

So they can use a non interest bearing account.

So why can't they just put their 'vouchers' into a non-interest bearing account?

tim

Reply to
tim

I bet this annoys the IR when they have to argue about CGT on a non-PPR.

tim

Reply to
tim

This is a troll, right? Surely you're not that bigoted.

Jon

Reply to
Jon Green

"tim" wrote

Because they don't want to miss out on the "interest"! [It'll just be called something else, in the accounts which they want to use.]

Reply to
Tim

It will be trading income rather than a capital gain

Reply to
Jonathan Bryce

Probably some sort of ethical with profits fund.

Reply to
Jonathan Bryce

For whom

please explain?

I was referring to when the Muslims sell on the house that they have bought at an artificially high value because 25 years of interest have been included in the purchase price (and hence they will likely as not, never make a gain on this basis). But, I'm not allowed to deduct my financing costs from my CGT bill when I sell a CGTable house, so why should they be allowed this?

tim

Reply to
tim

........................................................................................................................

On the contrary. An uninvested CTF is invested by default in 2006 by the government into a non-Sharia compliant stakeholder CTF. So I think there is a genuine complaint here.

At the moment there isn't enough information about the CTF funds being offered, I think, even to know if a non-interest cash fund is available. I think it is a bit problematic the way vouchers have been issued encourage people to invest even before many fund details are available. I think they've rushed the vouchers out to may sure that they arrive before May!

Thom

Reply to
Thom

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