3. How will my child’s savings be taxed in the future?

How will my child’s savings be taxed in the future?

Once our son’s balance grows (either from future gifts from us, or his (great) grandparents), in 18 years he could easily earn more than £100 in interest annually.

Savings allowance is £1000 for basic rate tax payers. What makes you think that in 18 years your son will be earning more than £1000 of interest per year? What interest rate are you expecting? Assuming a very generous 2.5% (which I don't think is available outside a JISA), your son would have to have over £40,000 saved to get more than £1000 interest per year.

That would mean he pays more tax than he should.

What do you mean by that? How much tax "should" he be paying?

Is it possible to get my grandmother to write a signed letter saying she gave the £1,000

What makes you think that the origin of your son's money makes any difference in how it is taxed?

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