Who Must Pay Zakat on Money Held in a Child’s Name?

Answered by Shaykh Abdul-Rahim Reasat

Question

Who must pay Zakat on money held in a child’s name, such as in a child’s bank account, but owned and controlled by the father?

Answer

I pray you are well.

Zakat is due upon the owner of the wealth. Whoever owns the money is the one responsible for paying Zakat on it.

Simply placing money in a child’s name does not automatically transfer ownership. The ruling depends on who truly owns the wealth.

If the Wealth Belongs to the Father

If the money is owned by the father, even if it is held in the child’s name, then the Zakat is due upon the father. The ownership has not transferred merely because the account is in the child’s name.

In this case, the father must pay his own Zakat on that wealth. It is not due upon the child.

If the Wealth Belongs to the Child

Sometimes a child possesses wealth that genuinely belongs to them.

In the Hanafi school, if a child has not yet reached puberty, no Zakat is due on their wealth, regardless of how much they possess.

Once the child reaches puberty, the ruling changes.

If they have reached puberty but are not mature enough to responsibly manage their wealth, the parents may keep the money in trust until the child is older and wiser in handling it. However, in this situation, the Zakat must still be paid.

When Zakat Becomes Due

If a child has, for example, ten thousand pounds in the bank, once they reach puberty, the Zakat year begins. After 12 lunar months have passed, 2.5% of the account balance must be paid as Zakat.

If the parents are managing the money, they must pay the Zakat on the child’s behalf.

If Zakat was not paid in previous years after puberty, then once the child gains access to the wealth, they must pay the outstanding Zakat.

In summary, Zakat is due upon the true owner of the wealth. If the father owns it, he must pay it. If it genuinely belongs to the child, then the rulings of puberty determine when Zakat becomes obligatory.

[Shaykh] Abdul-Rahim
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Abdul-Rahim Reasat began studying Arabic Grammar and Morphology whilst studying for a degree in English and History. After graduating, He traveled to Damascus and studied Arabic, Hanafi Fiqh, Usul al-Fiqh, Theology, and Logic with Shaykh Adnan Darwish, Shaykh ‘Abd al-Rahman Arjan al-Binsawi, Shaykh Husayn Darwish, Shaykh Muhammad Darwish, the late Shaykh Rashad Shams, and others. He then moved to Amman to continue his studies in those fields, as well as in Tafsir, Quranic Sciences, Hadith Methodology and Commentary, Prophetic Biography, Prophetic Perfections and Traits, Rhetoric, Arabic Literature, and Tajwid. His teachers include Shaykh Ali Hani, Dr. Hamza al-Bakri, Dr. Salah Abu al-Hajj, Dr. Mansur Abu Zina, Shaykh Ahmad Hasanat, Shaykh Ahmad Jammal, and others.