A halal stock in the UK is a share in a company that passes two tests: its business is permissible, and its balance sheet is not built on interest. The FTSE Russell Shariah methodology, screened by Yasaar, sets the numbers used by most UK funds: debt below 33.333% of total assets, cash and interest-bearing items below 33.333% of total assets, receivables and cash below 50% of total assets, and interest plus non-compliant income no more than 5% of revenue. Banks, insurers, brewers, tobacco firms, bookmakers and most defence companies fail the first test; indebted retailers and utilities often fail the second. This guide teaches the method rather than tipping names, starting from the halal stocks hub.
Ready to compare halal options?
The FTSE Shariah screening rules, from the methodology document
FTSE Russell's Yasaar Global Equity Shariah Index Series page and its ground rules document, both read on 11 September 2026, describe a two-stage screen reviewed quarterly. Stage one removes companies whose core activity is conventional finance, alcohol, pork and non-halal food, entertainment such as casinos, gambling, cinema, music and pornography, tobacco in all forms including vapes, and weapons and defence manufacturing. Stage two applies four financial ratios to the survivors. A company must pass both stages, and FTSE monitors compliance continuously.
- Debt must be less than 33.333% of total assets.
- Cash and interest-bearing items must be less than 33.333% of total assets.
- Accounts receivable plus cash must be less than 50% of total assets.
- Total interest and non-compliant income must not exceed 5% of total revenue.
- A company that crosses a ratio line is given a buffer of 5 percentage points either side of 33.333% and must sit outside it for two consecutive quarters before its status changes, which limits churn.
Two details matter for a DIY investor. First, FTSE uses total assets as the denominator, while AAOIFI-based screeners used by some apps use market capitalisation, so the same company can pass one and fail the other. Second, FTSE's methodology notes a purification figure for dividends based on the 5% impure income allowance, which is the number you use to cleanse your income. Our explainer on what makes a stock halal compares the FTSE, MSCI and AAOIFI thresholds line by line.
Which FTSE 100 sectors pass and which fail
The sector table below is a reasoning guide, not a stock list; the pass or fail of any individual company depends on its latest accounts and must be checked in a screener. The pattern is stable, though. London's index is heavy in the sectors that fail outright, which is why a halal UK portfolio looks very different from the FTSE 100 and why any UK Islamic index is short. The companies that typically survive are miners, oil and gas producers, pharmaceutical groups, consumer health and some industrials, subject to the debt ratio.
| FTSE 100 sector | Typical result | Reason under the FTSE rules |
|---|---|---|
| Banks and life insurers | Fail | Core activity is interest-based finance or conventional insurance |
| Alcohol, tobacco, betting | Fail | Prohibited business activity regardless of ratios |
| Defence contractors | Usually fail | Weapons and defence manufacturing is an excluded activity |
| Oil, gas and mining | Often pass | Permissible activity; passes if debt stays under 33.333% of assets |
| Pharmaceuticals and consumer health | Often pass | Permissible activity; watch the debt ratio after large acquisitions |
| Supermarkets and general retail | Mixed | Alcohol and tobacco sales can breach the 5% impure income limit; debt is often high |
| Utilities and telecoms | Mixed to fail | Capital-intensive balance sheets frequently exceed the debt ratio |
| Housebuilders and REITs | Mixed | Property is permissible but borrowing levels and interest income vary by company |
We could not load a dated FTSE Shariah UK or MSCI UK Islamic factsheet on 11 September 2026, so this article names no constituents. The place to find the current list is the FTSE Russell factsheet library at research.ftserussell.com, which publishes the FTSE Shariah All-World factsheet with top constituents and sector weights, and the quarterly review notices for the FTSE Global Equity Shariah Index Series, the latest dated 4 September 2026 with changes effective 21 September 2026. Treat any list you find on a blog or social media as a starting point to verify, not a conclusion.
How to check a UK ticker in a screener app
Screener apps do the ratio arithmetic from the latest filed accounts and show a pass, fail or doubtful rating for a ticker. Musaffa's site, read on 11 September 2026, describes a free plan and a premium plan on monthly or annual billing, screening against the AAOIFI methodology, with a compliance history of up to three years per company and coverage of over 11,000 US-listed stocks and ETFs through its own investing platform. The pricing figures themselves did not render on the page, so check them in the app. Zoya and Islamicly are the other two widely used apps; their pricing pages would not load for us, so confirm UK coverage and the current subscription on their sites before paying.
Whichever app you use, the method is the same. Search the London ticker, read the business screen first, then the ratio screen, then the impure income percentage, which is the number you will need later for purification. If two apps disagree, it is almost always because one uses total assets and the other market capitalisation as the denominator; the company has not changed, the ruler has. Decide which methodology you follow and apply it consistently, and re-check holdings each quarter when new accounts come out. Our beginner's halal investing guide shows the first screen step by step.
- Confirm the business screen passes: no core revenue from finance, alcohol, tobacco, gambling, pork, adult content or weapons.
- Check the three balance-sheet ratios and note which denominator the app uses.
- Record the impure income percentage for the year; you will purify dividends by that share.
- Set a quarterly reminder to re-screen, because a takeover or a debt-funded buyback can flip a company's status.
- Keep a written list of what you hold and why it passed, which also makes zakat day easier.
How to buy halal shares inside a stocks and shares ISA
Gov.uk sets the ISA allowance at £20,000 for the 2026 to 2027 tax year, shared across cash, stocks and shares, innovative finance and lifetime ISAs. Shares held inside the wrapper pay no capital gains tax and no dividend tax, which matters because outside an ISA gov.uk gives a £3,000 capital gains annual exempt amount and a £500 dividend allowance. For a DIY share picker the ISA is the default home. The halal stocks and shares ISA guide compares the platforms that list UK shares, the iShares Islamic ETFs and the HSBC fund; two things to check at any broker are listed below.
Share lending: some low-cost platforms lend out customer shares to short sellers and earn a fee, which involves an interest-like return on your assets; look for the option to opt out, or choose a broker that does not lend. Fractional shares: a fraction is a contractual entitlement held by the broker rather than a share in your name, and some scholars treat it differently; if that matters to you, buy whole shares. Wahed offers managed screened portfolios for people who would rather not pick, and Simply Ethical runs a scholar-supervised discretionary service with its own screened share lists.
Purification and zakat on your shares
Purification is simple once you have the impure income percentage from the screener. Multiply each dividend by that percentage and give the result to charity without claiming Gift Aid, since it is not your money to earn relief on. A company with 2% impure income paying you £500 of dividends in a year needs £10 given away. Capital gains need no purification under the FTSE approach, which confines the calculation to income; some scholars extend it to gains, and our dividend purification guide covers both views with worked examples.
Zakat on shares depends on why you hold them. Shares bought to trade are zakatable at full market value at 2.5% on your zakat date. Shares held for long-term income are, on the more common view, zakatable on the company's zakatable assets per share, which many investors approximate at a set proportion of market value; the zakat on savings, pensions and investments guide and the zakat calculator on this site handle the arithmetic. Keep the ISA wrapper in mind: zakat is due on ISA holdings like any other asset, since the tax shelter does not change ownership.
Building your own halal stock list in five steps
Start with the sectors that typically pass, screen each candidate, size positions so no single share dominates, hold inside an ISA, and keep a log. A beginner should aim for a core of a screened global fund with a handful of individually screened UK shares around it, rather than the other way round, because the UK halal universe is narrow and concentrated in commodities and pharmaceuticals. The how to invest halal guide sets out the fund-first version of this plan, and the investing hub lists every platform and fund we have reviewed.
- Write down which screening methodology you follow (FTSE total-assets or AAOIFI market-cap) and stick to it.
- Shortlist FTSE companies in permissible sectors and screen each one in your chosen app.
- Open or use a stocks and shares ISA at a broker that lets you opt out of share lending.
- Buy whole shares in no more than a handful of names alongside a screened global fund.
- Record the impure income percentage for each holding, purify each dividend, and re-screen quarterly.
Who should choose what
A first-time investor with under £10,000 should not pick individual shares yet: buy a screened global index fund inside an ISA and learn the screening method on paper first. An experienced investor who wants UK exposure should run the FTSE rules through a screener on miners, energy, pharmaceuticals and selected industrials, hold whole shares at a broker that does not lend them, and purify dividends by the published impure percentage. Anyone who finds the quarterly re-screening tedious should hand the job to a managed screened service and keep direct shares to a small satellite. Facts checked against lseg.com, musaffa.com, gov.uk on 11 September 2026.
Frequently asked questions
What makes a stock halal in the UK?
A permissible business and an acceptable balance sheet. Under the FTSE Russell Shariah rules the company must not have finance, alcohol, tobacco, gambling, pork, adult entertainment or weapons as its core activity, and must keep debt under 33.333% of total assets, interest-bearing cash under 33.333%, receivables plus cash under 50%, and impure income at or below 5% of revenue.
Is there a list of halal stocks in the UK?
The authoritative lists are the constituents of the FTSE Shariah and MSCI Islamic indices, published in dated factsheets by FTSE Russell and MSCI, and the pass ratings in screener apps such as Musaffa, Zoya and Islamicly. Lists on blogs and social media go stale fast, because a company's status can change every quarter when new accounts are filed.
Are FTSE 100 shares halal?
Some are, most are not. Banks, insurers, alcohol, tobacco, betting and defence companies fail the business screen, and many retailers, utilities and telecoms fail the debt ratio. Miners, oil and gas producers, pharmaceutical groups and consumer health companies often pass, but each must be checked against its latest accounts in a screener before you buy.
Can I hold halal shares in a stocks and shares ISA?
Yes. Any share listed on a recognised exchange can go in a stocks and shares ISA, and the £20,000 allowance for 2026 to 2027 covers all your ISAs combined. Inside the wrapper there is no capital gains tax or dividend tax. Choose a broker that lets you opt out of share lending and, if it matters to you, buy whole rather than fractional shares.
How do I purify dividends from halal stocks?
Take the impure income percentage the screener shows for the company, multiply each dividend by it, and give that amount to charity without claiming Gift Aid. If a company has 3% impure income and pays you £200, give away £6. Under the FTSE methodology this covers income only; some scholars also purify capital gains.
Compare providers in your state
See side-by-side comparisons of Shariah-compliant products, or let our matcher recommend the best options for your situation.
Do I pay zakat on shares held in an ISA?
Yes. The ISA is a tax wrapper and does not change the fact that you own the shares. Shares held to trade are zakatable at full market value at 2.5%; shares held for long-term income are, on the common view, zakatable on the company's underlying zakatable assets, which many investors approximate with a fixed proportion of market value on their zakat date.
