Will-Writing (appendix)
Archived under Tazkiyyah .
I released two entries in March on the subject of writing a Will (entry one & entry two). I failed to note that readers should find out what the law of their particular country/ state says about an Islaamic Will and whether or not is is deemed as valid.
Brother Junaid made a comment asking what the UK law is regarding the Islaamic Will and I responded that I would post my findings here - so here they are.
Conditions that have to be fulfilled to render the Will valid and legal:
1. You must be at least 18 years old;
2. Of sound mind;
3. Your Will must be in writing;
4. Your Will must be made without any undue influence;
5. You must identify yourself as the author of the Will. You should state that it is your last Will – and that any previous Wills and Codicils are revoked;
6. The Will must be dated and signed by you in the presence of and attested by two witnesses who are neither a spouse nor a beneficiary under the Will.
7. The witnesses must not be under 14 years of age. They must be 14 or over.
8. All signatories must be present throughout the signing process. No signatory may leave the room until all signatories have signed each page.
Inheritance Tax
In the UK, the Inheritance Tax is the tax that is paid on your estate* when you die, as well as on some assets that you may have given away during your lifetime. The current rate is 40% which is charged if your estate exceedes the £270,000 threshold.
So for example, if your estate is valued at £526,000, the inheritance tax liability would work out as £105,000.
There are ways that you can use to minimize or eliminate having to pay inheritance tax including the following:
1. Bequests to registered charities in the UK – in accordance with Islamic guidelines, bequests can only be made up to a maximum of 1/3 of the estate after payment of debts, funeral, tax and administration expenses. So long as the charity is registered in the UK the gift will be free from inheritance tax.
2. Gift exemptions – you can give away as many small of gifts of £250 every tax year as you wish, £5,000 to each child on their marriage and regular gifts out of your income provided they don't affect your standard of living. In addition to this, you are entitled to give away £3000 every tax year without an Inheritance Tax charge. This annual exemption may be carried over to the following year if it remains unused – but not thereafter.
3. Gifts made seven years prior to death –Also referred to as Potentially Exempt Transfers (PETs), these gifts are exempt from Inheritance Tax. If however you don't survive seven years from the date of making the gift, Inheritance Tax is charged on a sliding scale ranging from the full 40% in the first three years to 8% if you die between the fourth and seventh year after making the gift. However, where you continue to reserve an interest in the gift – (for example by residing rent-free in a property that you have gifted to your child), Inheritance Tax will be liable at 40% irrespective of when the gift was made.
4. Gifts between spouses (inter-spouse exemption) / discretionary trusts– all transfers between husband and wife are free of inheritance tax. However it is important to note that Muslim marriages conducted in the UK without a civil marriage ceremony are not recognized as valid marriages under English law and therefore the inter-spouse exemption rules cannot be applied. Furthermore on the surviving spouse's death - inheritance tax is liable on the entire estate, so it may not necessarily be the most appropriate option.
* In layman's terms, 'your estate' is everything that you own at the time of your death - all of your assets, minus anything that you owe.
Keep it Safe!
Once you have made your Will and it has been signed and witnessed, store it in a safe place or with a trustworthy relative or friend. Make sure that your executor(s) are informed where the original Will is being kept and keep a photocopy for your own records.
Review your Will on a regular basis, since changing circumstances – especially your marital situation (marriage, divorce or re-marriage) may affect its validity.
Do not try to alter your Will by crossing out or adding words. If you do this, your Will may be rendered invalid in the eyes of the law, so if you then die without having made a new Will, it will be as if you had never made a Will at all.
Resource: Islamic Wills
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