“Contrary to popular belief, children are liable for tax, although few are fortunate enough to earn enough on their savings and investments to actually pay any," says Stevenson.
“There will only be tax to pay by your child if they earn above their personal allowance. The standard personal allowance is currently £11,000 ($14,378, €12,692), so there won’t be any tax to pay as long as the interest they earn amounts to less than £11,000 in the current tax year.
“However, the rules are tougher if the interest is earned on money from a parent. If your child earns more than £100 in interest in any tax year from money you have given them, then you will be personally liable for tax on the interest earned, if it’s above your personal allowance.
“The good news for grandparents, aunts, uncles, godparents and anyone else who gives money to a child, is that the same tax liability does not apply.”