Hibah is a gift contract by which a person voluntarily transfers ownership of an asset or a sum of money to another during their lifetime, receiving nothing in return, the gift becoming complete once the recipient takes possession of it.
A transfer of ownership with no consideration
Hibah belongs to the family of charitable contracts known as tabarru'. The donor willingly gives up wealth for the recipient's benefit without demanding a price or service. This gratuitous nature explains why some uncertainty forbidden in a sale is tolerated in a gift.
The four pillars of a valid gift
There must be an adult, sane donor who owns the asset; a recipient able to accept, directly or through a guardian; an object that exists, is lawful and identifiable; and an offer and acceptance expressed in words, writing or an unambiguous gesture.
Why taking possession seals the gift
For most schools of law, Hibah only becomes final after actual delivery, called qabd. While the asset remains in the donor's hands, they may change their mind, and death before delivery normally causes the intended gift to lapse entirely.
Can a delivered gift be taken back?
Once delivery has occurred, the Maliki, Shafi'i and Hanbali schools in principle reject revocation, citing a stern hadith about whoever reclaims a gift. They nevertheless allow a father to retract a gift made to his child, while the Hanafi school applies a distinct regime.
Hibah on Islamic deposit accounts
On a current account based on Qard or guaranteed Wadiah, the depositor cannot demand any return. The bank may nonetheless pay, entirely at its discretion, an occasional gift as a gesture of thanks, provided it was never promised when the account was opened.
When a regular gift starts to look like interest
Jurists recall the maxim that what is customary counts as what is stipulated. If a bank pays a monthly Hibah calculated on the balance at an advertised rate, the gift becomes disguised payment for the loan, and therefore riba.
How banks frame this discretionary payment
In practice, any payment is decided by management after consulting the Sharia board, with no published formula or guaranteed amount. It may vary, be suspended or never happen at all, and the account documentation should tell the customer so plainly.
What account holders should look for in the terms
Check the account's underlying contract, an explicit statement that any gift is optional, the absence of a return table, and how the balance is protected. A savings account that pays a return usually relies on Mudaraba or Wakala instead, a different mechanism.
Giving during life or bequeathing by will?
A bequest, or wasiyya, takes effect on death, is capped at one third of the estate and in principle cannot benefit a legal heir. Hibah, made during the donor's lifetime, escapes these limits, which makes it a tool for estate planning.
Deathbed gifts and fairness between children
A gift made during the illness that precedes death is treated as a bequest and is therefore subject to the one-third limit. Jurists also urge fairness between children, as a hadith disapproves of a father who favoured only one of his sons.
Naming a Hibah beneficiary in a Takaful plan
In some markets, a family Takaful participant can name a beneficiary who will receive the death benefit as a Hibah, rather than having it divided according to inheritance shares. This nomination must comply with local law and the operator's rules.
Points to settle before formalising a gift
Have a written deed drawn up, arrange genuine delivery of the asset, for instance by registering a title in the recipient's name, and check the gift tax rules of the country concerned. A lawyer and a qualified scholar will confirm compliance for your situation.
Specialist external source
The Bank of England explains how UK Islamic banks fit within regulation and manage liquidity without interest, the setting in which deposit accounts paying a Hibah operate.