He owns a gold watch; how can he dispose of it in such a way that he does not commit any infraction?

It is unlawful
for men to wear gold, whether it is in the form of a ring, a watch or
anything else, because of the report narrated by Muslim (2090) from Ibn
‘Abbaas (may Allah be pleased with him), that the Messenger of Allah
(blessings and peace of Allah be upon him) saw a gold ring on a man’s hand.
He took it off and threw it aside, and said: “Would one of you go and pick
up a live ember of fire and hold it in his hand?” After the Messenger of
Allah (blessings and peace of Allah be upon him) had left, it was said to
the man: Take your ring and benefit from it (by selling it). He said: No, by
Allah, I will never pick it up when the Messenger of Allah (blessings and
peace of Allah be upon him) has thrown it aside.

Abu Daawood
(4057), an-Nasaa’i (5144) and Ibn Maajah (3595) narrated from Ali ibn Abi
Taalib (may Allah be pleased with him) that the Prophet (blessings and peace
of Allah be upon him) took a piece of silk in his right hand and a piece of
gold in his left, then he said: “These two are haraam for the males of my
ummah.” This hadith was classed as saheeh by al-Albaani in Saheeh Abi
Dawood.

It is
permissible for women to wear gold jewellery, such as rings, bracelets and
earrings.

With regard to
watches that contain gold, if the custom is that they are something that is
worn as jewellery, then there is nothing wrong with that (for women),
otherwise it is unlawful for women to wear them, just as it is also unlawful
for women to use pens and the like made of gold, items that are not regarded
as jewellery.

An-Nawawi (may
Allah have mercy on him) said: Our companions and other scholars said: Using
vessels made of gold and silver is equally unlawful for both men and women.
There is no difference of scholarly opinion concerning that, because of the
general meaning of the hadith and because the reason for the prohibition is
applicable to both men and women. Rather the differentiation between men and
women with regard to jewellery is because jewellery is part of women’s
adorning themselves and beautifying themselves for their husbands.

End quote from
al-Majmoo‘ (1/306).

Al-Bahooti (may
Allah have mercy on him) said:

It is
permissible for women to wear jewellery because they need it in order to
adorn themselves for their husbands. What is prohibited of using vessels
(made of gold and silver) is because it is prohibited to use tools made (of
those precious metals), even if it is a kohl stick [used to apply kohl to
the eyes]. Similar to the prohibition on using a kohl stick (made of gold or
silver) is using lamps, beds, chairs, shoes, spoons, doors and shelves if
they are made of gold and silver.

End quote from
Kashshaaf al-Qinaa‘ (1/51)

Based on that,
if it is a men’s watch, then the matter is clear. There are two ways of
getting rid of it:

1.

You can remove
the gold from it and sell the gold separately and sell the watch separately.

2.

You can return
it to the seller and ask him to let you off the transaction; this is an
annulment, not selling it back to him, even if the seller stipulates that he
will deduct something from the price he gives back to you.

It says in
Mataalib Ooli an-Nuha (3/154): Annulling a transaction is not selling
(or selling something back), because it is like reversing the transaction.
End quote.

See also:
ash-Sharh al-Mumti‘ (8/389).

As for selling
it to the disbelievers, that is not permissible, because the minor issues of
sharia also apply to them, so what is prohibited to Muslims is also
prohibited to them. Al-Bukhaari (876) and Muslim (5981) narrated that ‘Umar
ibn al-Khattab saw a suit of silk being sold at the door of the mosque, so
he said: O Messenger of Allah, why don’t you buy this and wear it on Fridays
and when the delegations come? The Messenger of Allah (blessings and peace
of Allah be upon him) said: “This is only worn by one who has no share in
the hereafter.” Then the Messenger of Allah (blessings and peace of Allah be
upon him) received some suits of silk, and he gave one of them to ‘Umar ibn
al-Khattaab (may Allah be pleased with him). ‘Umar said: O Messenger of
Allah, are you giving it to me to wear when you said what you said about the
suit of ‘Utaarid [that was for sale at the door of the mosque]? The
Messenger of Allah (blessings and peace of Allah be upon him) said: “I did
not give it to you to wear it.” So ‘Umar ibn al-Khattaab (may Allah be
pleased with him) sent it as a gift to a brother of his in Makkah who was a
mushrik.

An-Nawawi (may
Allah have mercy on him) said in Sharh Muslim (14/39): Some may think
this indicates that it is permissible for non-Muslim men to wear silk, but
this is a wrong notion, because the hadith only speaks about giving a gift
to the disbeliever; there is nothing in it to indicate that it is
permissible for a disbeliever to wear silk. The Prophet (blessings and peace
of Allah be upon him) sent (the silk garments) as gifts to ‘Umar, ‘Ali and
Usaamah (may Allah be pleased with them).

That did not
indicate that it was permissible for them to wear those things; rather the
Prophet (blessings and peace of Allah be upon him) clearly stated that he
only gave those items to them to use them in ways other than wearing them.
The correct view, which is that of the majority of scholars, is that the
minor issues of sharia are also addressed to the disbelievers, so it is
unlawful for them to wear silk just as it is unlawful for the Muslims to do
so. End quote.

And Allah knows
best.