Q: I gifted my son £1,000 and hold this in an account in my son’s name. However prior to his 18th birthday he is not able to access that money without my consent. In this instance is he liable for zakāh?
الجواب حامدًا و مصليًا و منه الصدق و الصواب
A: This would be considered a nominee structure for a minor and it is as if a trust is place.
Any gift a father makes to a minor is completed by the act of gift itself. Acceptance on behalf of the minor is not required. Thus, while your son remains a minor, any money you deposit into his account will transfer into his ownership with immediate effect. However, upon reaching the age of majority, your son must take possession of any future gifts in his own right. Your possession cannot sufficeon his behalf. Thus, ownership of any money deposited by you into your son’s account after the age of majority will only transfer to him if he is authorised to access the same.
Consequently, while access to the money remains restricted, complete possession cannot be realised and thus ownership is not hitherto transferred to him. If the terms of the trust now restrict you from benefiting from the trust property, your ownership will be defective. If you consent to his possession, or he reaches the age of eighteen, complete possession will be realised by your son and ownership will transfer to him.
Zakāh is not payable by either you or your son until he reaches the age of majority. After the age of majority if you consent to your son’s possession he is liable for zakāh, otherwise, as he has hitherto not secured ownership, zakāh liability will only accrue to him subsequent to him reaching the age of eighteen. In the interim, if the terms of the trust now restrict you from benefiting from the trust property, your ownership will be defective and you also will not be liable for zakāh.
For a detailed breakdown of The Treatment of Trusts for Zakāh purposes, please visit the Research Paper section on www.alqalam.org.uk