Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Wakala definition

What does Wakala mean? In Islamic finance, wakala (also spelled wakalah) describes an agency arrangement under which a principal (muwakkil) appoints an agent (wakil) to act on its behalf, commonly to invest funds or operate a takaful scheme in line with Sharia principles. In UK and Irish practice it is not defined in statute or domestic case law; it is a term of art from Islamic law and market documentation (including AAOIFI standards), typically implemented through an English, Scots, Northern Irish or Irish law agency agreement. Key features usually include: a defined investment or operational mandate with Sharia-compliant asset restrictions; the agent’s fiduciary and duty...

UK tax treatment of wakala profit-share agency arrangements: alternative finance rules, corporation tax, withholding, stamp taxes and VAT

Published by a LexisNexis Tax expert

Practice notes

Shari’a‑compliant finance arrangements (often referred to as Islamic finance arrangements) appear in several forms. The UK has enacted targeted provisions, called the alternative finance arrangement Rules, to address the direct tax treatment of particular Shari’a finance structures. These UK rules are designed to ensure Shari’a‑compliant finance is, for UK direct tax, treated as if it were a standard loan. That outcome applies only where the arrangements meet the specific statutory conditions for alternative finance arrangements. At present, the rules extend to five distinct categories of financing. Certain parts of the tax code, such as VAT, have not created bespoke provisions for Islamic finance, which may give rise to uncertainty and to circumstances where Shari’a‑compliant finance is not aligned with the treatment of conventional finance. The direct tax regime for alternative finance arrangements is not confined solely to Islamic finance. Non‑Shari’a structures could also come within the ambit of these rules. Among the five alternative finance forms recognised in UK tax law is a profit share agency arrangement. In effect, the framework seeks neutrality between Islamic and conventional financing for direct taxes, while acknowledging that gaps remain elsewhere. Scope is, however, broader than Shari’a finance alone today.

Profit share agency arrangement

...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Sarah Squires

Old Square Tax Chambers

Sarah is a barrister at Old Square Tax Chambers, having been called to the bar in 2017. She has significant corporate tax experience, having practised a as a solicitor in leading City firms prior to re-qualifying as a barrister. She started her professional career in the tax department of Linklaters and then, following a move to Clifford Chance LLP in 2000, became a partner in their tax group in 2002. Sarah is a member of the Law Society Tax Law Committee. In addition, she also acts as a consultant to various trade and other representation bodies on tax policy matters. Sarah's practice is focused on general business and corporate tax matters, including in relation to real estate, finance and capital markets transactions....

Web page updated on 22/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...