I'd recommend getting two guitars, a 1/2-size for the tot and a 3/4 for the elder. That way, no fighting. Don't buy toys, the Yamaha range is a Good Recommendation. A guitar emporium will either have them in stock or can order them, and they're not that expensive (around £50 or so, I think..?). It's a Good Plan to get the kids interested, and, even if they don't pursue as ados, they'll have a head-start if/when they decide to take it further.