Q: I have a question regarding the calculation of my zakat liability.
My money has been deposited with HMRC to pay for outstanding tax liabilities. In theory I could still withdraw that money before 2019, but in this case interest would accrue and I would have to pay it all back in 2019 regardless. The amount I have deposited with HMRC, to service the debt when it becomes due, far exceeds the amount of wealth that I have left over.
Therefore do I still have to pay zakat on the money deposited to service the debt?
الجواب حامدا ومصليا ومسلما ومنه الصدق والصواب
A: The advice that I have been given is that the money deposited with HMRC remains your property and, as stated by you, you may withdraw it. Thus, this is Zakatable wealth. However, you may also deduct your actual tax liability from 2015/2016 from this sum and pay zakat on the balance, if any.