Home  ›  Ilm Hub  ›  Answers  ›  What is riba and how does it work in Canada?
Ilm Hub

What is riba and how does it work in Canada?

Riba is interest, prohibited in Islamic law.

This is legal information only. For advice on your own circumstances, speak to a lawyer.

Riba is interest, prohibited in Islamic law.

The Canadian position

Interest income is taxable on the final return regardless of religious treatment.

Canadian law gives effect to whatever a valid will says, so an Islamic concept takes effect here through the drafting rather than automatically.

The Islamic position

Where interest has accrued in an estate, scholars commonly direct that portion to charity.

Confirm the position for your own family and school with a qualified scholar rather than relying on a general summary.

Researched — the schools differ

All four schools treat unlawful gain as something to be got rid of rather than enjoyed, and all four hold that an heir who has no idea how the deceased earned his money takes it lawfully — that much the Kuwaiti Encyclopaedia records as ijma‘. Where they differ is what the heirs must do when the tainted amount is known, which is exactly the Canadian case, because a bank statement shows it to the cent. The Hanafi school puts it as the better course and turns on whether the money is identifiable; the Shafi’i school has the heir extract the unlawful portion by his own best estimate; the Maliki position, in Ibn Rushd al-Jadd’s words, is that inheritance does not make unlawful money wholesome at all; Ahmad’s reported rule turns on how large the fund is.

All four Sunni schools researched and sourced. Reviewed 2026-09-01. Full positions, evidence and sources — Interest money in the estate — what must the heirs do?.

Note

This is legal information only. For advice on your own circumstances, speak to a lawyer.

Citations & sources

Every factual claim on this page traces to a source below. Details change — check the original source before relying on any figure, fee or legal position. Anything under “further reading” is related material, not a source for what is stated here.

Scholarly & institutional references
  1. Shari'ah Standards — AAOIFI
  2. International Islamic Fiqh Academy — Organisation of Islamic Cooperation
Canadian legislation & government
  1. What to do when someone has died — Canada Revenue Agency
  2. Income Tax Act, RSC 1985, c 1 (5th Supp) — Justice Laws Canada
Further reading — Treadstone Law
  1. Deceased final tax return estate taxes ontario — Treadstone Law
  2. Trustee compensation taxable income — Treadstone Law
  3. Rrsp contribution deceased persons final return canada — Treadstone Law
  4. Disability tax credit deceased persons final return canada — Treadstone Law
  5. Wills & estates practice — Treadstone Law