Money from Parents

If the income from these savings is not more than £100 per tax year, it is treated as the child’s income and is normally free of tax. If it is more than £100, it is treated as the parent’s income and is subject to their highest rate of tax.

This rule applies to each parent individually, so if gifts are made separately by each parent, the child could receive up to £200 of income before tax is levied.

Once the child reaches 18, all income is treated as the child’s own. (One exception to the £100 rule is the interest on the National Savings Children’s Bonus Bond which is treated as the child’s regardless of who provided the money to buy the bonds.)