Absolute possession of the wealth
Among the conditions for Zakaat to be compulsory is that it should be in absolute possession of the individual. Absolute possession is when the individual has ownership as well as possession of the wealth. If ownership is there, but possession isn’t or if possession is there but no ownership, then it isn’t considered to be absolute possession and as such Zakaat isn’t compulsory.
As mentioned in Radd Ul Muhtaar, Kitab Uz Zakaat.
Having possession but not ownership can be explained with the example of a borrower. A borrower will have possession of the amount borrowed but isn’t the owner of it. As such, when calculating Zakaat, this debt will not be included in it.