Firstly: A gift is a transfer of ownership without compensation, intended for gifting, generosity, goodwill, friendship, kindness, or rewarding. It falls under the category of donations, not compensations.

The Prophet Muhammad (peace be upon him) encouraged giving gifts for the sake of fostering love as he said: “Exchange gifts, as that will lead to increasing your love to one another,” and he advised Muslim women saying: “None of you Muslim women must consider even a sheep’s trotter too insignificant a gift to give to her neighbor.”

The majority of scholars recommend accepting gifts, and this is the consensus among the ḤanafiYs, Mālikiys, Shāfi῾iys, and one narration among the Ḥanbaliys. Some Ḥanbaliys, even argue for the obligation of accepting a gift unless it involves seeking something from the giver or anticipating a favor. In general, this includes all types of gifts, whether given by individuals or employers.

Secondly: Scholars unanimously agree on the permissibility of accepting tangible gifts from an employer to their employee. However, they differ regarding gifts in the form of benefits, such as providing free training courses, transportation services, or vacation packages. The majority consider them to be a form of intangible gifting, while others argue that they are a kind of borrowing a benefit. Modern scholars also discuss this type of gift, often treating it as a tangible gift in terms of its value.

Thirdly: Tangible possessions can be categorized as either permissible or impermissible. Permissible tangible possessions are those acquired by a Muslim through legitimate means, while impermissible tangible possessions include items like pork, alcohol, ill-gotten wealth, and gambling proceeds. Impermissible possessions cannot be used for transactions by a Muslim, whether selling, buying, renting or gifting; or with or without compensation.

If a Muslim receives impermissible possessions, it is not permissible for them to benefit from them in any way because it is impermissible. The Prophet Muhammad (peace be upon him) prohibited Muslims from giving wine as gifts to non-Muslims, and he did not permit selling it to non-Muslims in Madinah, because this is an invalid transaction. This is the view of the majority of scholars, with an exception made by some Ḥanafiys for distinguishing between transactions in the Muslim and non-Muslim communities, allowing the sale of impermissible possessions to non-Muslims in non-Muslim lands. They argue seeking a financial benefit does not contradict with the invalid contract.

In conclusion, regarding the question at hand:

It is not permissible for a Muslim to use the prohibited portion of the gift for personal benefit. Instead, they should dispose of it. They may sell it to a non-Muslim in non-Muslim communities, benefiting from its value, according to the majority of the Ḥanafiys. It is not permissible to gift it to a non-Muslim since it is originally an impermissible possession.

Fatwa by Dr. Khālid Naṣr