Is Zakat payable on wealth not held in possession for the entire year?

Q: In the beginning of the year 2014 my husband and I were looking to purchase our first home.We are currently renting privately. I had about £50,000 savings. We both work full time and our salaries were going to contribute to the eventual purchase (as it takes about 12-16 weeks for completion and all monies to be paid). As we were going to buy a property, my brother returned to me £20,000 which I lent him about 3 years ago. The purchase of this particular property has now fallen through. Our plan now is to keep looking for a property, but it may take us into 2015 or even another year, for us to find something suitable. But if something does come up, then we need to be in a position to snap it up, so to speak.

I now have £70,000 in an instant access IBB savings account. I am not touching that money as its our deposit fund to buy a house. Do I have to pay zakat on all of the £70,000? Someone told me if you have not had the full £70,000 for the year, then its not payable etc. I have no issue paying it as its only to purify my wealth of course, but I have to say I am very confused on the rules about nisab and how long you need to have had the money etc. Can someone kindly give me any advise or refer me to a scholar or expert on this? I want to pay it asap, especially before next Eid. I follow the Hanafi madhab if that makes any difference?

الجواب حامدا ومصليا ومنه الصدق والصواب

A: Once you reach the level of nisab, which quite clearly you have done so for a while, any money received subsequently does not require the passage of the year.  On the contrary, once your zakat anniversary arrives you should pay zakat on your net zakatable assets which are your current zakatable assets less any qualifying liabilities.  Thus the entire £70,000 is potentially zakatable.

Additionally, the £20,000 you lent to your brother was also zakatable.  If you have not paid zakat on that then it is payable for the last three years.  In the first year zakat is payable on the full £20,000, in the second year it is payable on £20,000 less the 2.5% zakat (£19,500) and in the third year it is payable on £19,500 less the 2.5% zakat (£19,012.50).


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