Tax on interest on children’s bank account

I manage a savings account on behalf of my young child. I have recently become aware that if they earn over £100 interest per year from deposits made by a parent, then the whole interest is taxed at the same rate as the parent (or at least counts towards the parent’s personal savings allowance). My son has earned over £200 interest this year based on the total balance of his savings - but his parents would have only paid c.£500 into his account in the last tax year, which would have attracted far less than £100 interest on that amount only. My question is whether the rule is cumulative, ie over the lifetime of the account to date, we will have paid enough in total into his account (say £5000 (plus interest on those deposits)) to attract over £100 interest per year going forward, but in each individual year, the amount we pay in is only around £500 and therefore not enough to attract interest in excess of £100 if the calculation is only based on what is paid in that previous year by the parents. Will the fact that he has earned over £100 interest this year but based on historic deposits (ie from previous years) impact on my PSA and potentially therefore be taxed? Secondly, if a grandparent wants to gift a sum that would attract over £100 interest, but that gift comes via me (ie they pay it to my account and I then transfer it to my child), would that impact on my PSA/would my child have to pay tax on the interest? The money is a gift from a grandparent, but comes through my bank account in transit to my child’s. I have documentation to show that it is a gift originating from the grandparent however. Thanks for your clarification.

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