Sukuk (singular form: ‘sakk’) is a type of Shari’a financing arrangement also referred to as Islamic bonds or certificates. For more information, see Practice Note: Sukuk—investment bond arrangements and their UK direct tax treatment—What are sukuk? Sukuk may benefit from the UK tax treatment provided to alternative finance investment bond (AFIB) arrangements if all the relevant conditions are met. For more information on those rules, see Practice Note: Sukuk—investment bond arrangements and their UK direct tax treatment.

Sukuk al ijara is a particular form of sukuk. Under a sukuk al ijara, the asset held by the bond-issuer (the term the legislation uses to refer to the sukuk issuer) on trust for the investors in the sukuk (the certificate holders) is often land. The issuer acquires an interest in land by way of a sale and leaseback—it is this sale and leaseback arrangement that is the ijara. For more information, see Practice Notes: Sukuk al ijara—tax reliefs for sale and leaseback arrangements—What is sukuk al ijara?, The