Child savings tax

If a child has a savings account with funds provided by one or both parents and also from one or both grandparents and given that the interest on funds provided by the grandparents is not liable for tax whereas the interest on funds provided by parents IS liable for tax of it exceeds £100 how is the actual tax calculated as the capital has come from various sources. Is it best to keep parent versus grandparent funds in separate accounts?

Hi warman,
Where a child gets more than £100 in interest from money given by a parent.
The parent will have to pay tax on all the interest if it’s above their own Personal Savings Allowance.
The £100 does not include money given by grandparents, relatives or friends; or in a Junior ISA or Child Trust Fund.
How you break this down to identify the parents element is up to you.
SAIM2430 - Interest: taxation of interest: children's accounts
Thank you.