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Question
I wish to know if Zakat is due in the follwoing case:
My wife and I both borrowed an interest free loan of more than £100,000 as a deposit to purchase a house from our brother in law. On top of this I borrowed a further £150,000 from an Islamic bank as a mortgage for the same property in London. Thus, we are effectively in debt of £250,000 since February this year. My income is in excess of £35,000/yr. Do I have to pay any Zakat on any savings after a year and my wife on her jewellery which is in excess of the Nisab in weight?
Answer
The rule is that one discharge Zakah on one's savings after the elapsing of a year having subtracted your debts that will be paid in that year. If you find, after this calculation, that you no longer possess the Nisab limit then you have no Zakah to discharge. As for the jewellery, again if the gold reaches the Nisab for gold (i.e. 87.48 grams) and the silver reaches the Nisab for silver (i.e. 612.36 grams), then she must work out eachs' total value and give 2.5% of their value in Zakah on each one separately. The jurists have also stated that if neither, or just one of the two, does not reach to the Nisab then it will be added to one's other possessions that are Zakatable and then see if now its value reaches the Nisab, if it does then Zakah at 2.5% will be discharged for it.