Do children have to pay tax?

[DeathOrCake]

DS will soon be receiving a large amount of money (over £10,000). He is 4, and has his own bank account. Do I need to declare it to anyone?
Will he pay tax?
Any advice? Thanks.

Children have the same taxable allowance as adults. I'm guessing this is an inheritance in which case he wouldn't be taxed on it. If it's a gift then it does need to be declared as there are limits on how much a person can be gifted in a year without paying tax. I'm not sure what the current limit is.

If he gets enough money in the account to take his interest earned in a year over the personal tax limit then he would have to pay tax on it.

you wouldn't need to declare it if it is a gift (for IHT there are rules on whether a gift is an exempt transfer or a potentially exempt transfer, but either way if it is a gift from an individual it wouldn't be taxable now and would be an issue for the estate of the person making the gift if they were to die within a certain timeframe, not for your DS).

If it is a gift from his parents, then any income earned from the capital would be taxable on his parents if that annual income exceeded £100 in a tax year.

Otherwise, a child has a personal allowance in the same was as an adult.

Thanks for the quick replies. He has earned it, by filming for a TV commercial.
I have looked online, but it's not very clear.
Do you know what the taxable allowance is? Is it the same as for adults?
Thanks again.

Ooh, not been on here for a while, just seen the new icons!

Personal allowance is £7,475. Income above this is taxed at 20% (then 40% above the next threshold but I'm sure that you don't need to worry).

You should really get in touch with HMRC because if the money isn't taxed at source (ie by the company paying) then a tax return is needed and if it's late, could get fined.

Iggly is correct. Spot on.

Thank you all