Assalamu alaikum wa rahmatullahi wa barakatuhu.
I’ve not found an answer to this previously and I just want clarification, forgive me if it’s a basic issue.
I’ve not been living in the UK for the past few years and managed to do a self-assessment tax return on my income that was UK taxed. It came under repayment and it was tax that I overpaid which entitled me to a refund.
The refund amount was calculated as: tax overpaid + repayment interest which is 1% below base rate for that year.
I know that any interest unintentionally gained should be donated, should I just donate this money as sadaqah that I know I won’t benefit from, or can I take the percentage of it that would have been considered inflation and donate anything over it. For example if inflation was 2% and the repayment interest was 4%, would it be permissible to take half of the repayment interest amount (2%) and donate the remaining or is it haram in its entirety?
Afterall, the tax I paid in 21/22/23 etc. is less valuable today than it was then but I’m unaware of the finer nuances.
And if I have to get rid of it all as a donation, can I use it towards any type of sadaqah or are there certain conditions? Such as if I’m sponsoring an orphan or the like, could it be used towards that?
Jazakumullahu khairan