But how can the second type make two holdings like a single holding, when my property belongs to me and yours belongs to you?

The answer is that this is indicated by the hadith of Abu Bakr (may Allah be pleased with him), which states: “Separate holdings are not to be combined, nor jointly held property divided, in order to avoid zakat. If property belongs to two commingled owners, they shall settle the matter between themselves equitably.” (1)

Commingling affects both the obligation of zakat and its exemption. This is why he said: “Jointly held property is not to be divided, nor separate holdings combined, in order to avoid zakat.”

An example of the Prophet’s saying, “Jointly held property is not to be divided in order to avoid zakat,” is where I own forty sheep and the zakat collector is due to come tomorrow. I then place twenty of them in one location and twenty in another. When the collector arrives, he finds twenty sheep here and another twenty there, and so he takes no zakat from them, since neither group has reached the minimum taxable threshold.

An example of the Prophet’s saying, “Separate holdings are not to be combined in order to avoid zakat,” is this: I own forty sheep, you own forty, and a third person owns forty, making a total of one hundred and twenty. If each owner were considered separately, three sheep would be due; but if all the sheep are combined, numbering one hundred and twenty, then only one sheep is due, as mentioned previously.

Thus, separate holdings have been combined so that three sheep will not be due on the total, but only one sheep.

Issues:

First: commingling has no effect with respect to anything other than grazing livestock.

For example, if ten of us owned a farm, with each of us owning one-tenth of it