At current savings rates, the flat tax in Box 3 (income from savings and investments) is very hefty. At least, if you have not chosen to house your savings accounts in a savings limited company or fund.
The savings and investments of your minor children are not taxed with the children, but in your Box 3. This obviously applies not only to your own children, but also to your step- and foster children. You will not get any (additional) exemption or discount.
Active and passive income
The law distinguishes between active and passive income. Active income is taxed on the minor child. Passive income is attributed to the parent(s) having parental authority over the minor child.
The dividend tax withheld from the child's dividends may be offset against the income tax payable by the parent. A child is a minor as long as it is under 18 years of age.
Active income is profit from business, income from other activities and salary from employment (box 1). Savings and investment income (box 3) and income from substantial interest (box 2) constitutes the passive income of minor children.
Not devoid of all reasonableness
The Zeeland-West Brabant District Court recently ruled that the legislator's choice to tax the passive income of minor children with the parents is not devoid of any reasonableness. The reason for this attribution is that the legislator wants to prevent parents from realising a tax benefit. They could do so by transferring (temporarily or otherwise) assets from their Box 3 to their minor children.
The court also does not consider it unreasonable for the legislator not to grant the parents an (additional) exemption or discount. If the savings and investments were taxed with the minor child, the child would be entitled to tax-free assets. Then the first €25,000 of assets would be exempt. In addition, the child's general tax credit could be deducted from the tax (to the extent that this credit is not offset against the tax on the child's active income). That discount amounts to (at most) €2,254 in 2017. A child with no active income could have well over €200,000 in assets in Box 3 without paying income tax.