My older son worked it out on his own from school by 9 years of age. My younger now 6 on a different fib we tell them, told me he knew there wasnt a tooth fairy. I had been caught in the wee dark hours of the morning swapping the tooth for the money (forgot the night before......I was really tired!
) In the morning he came out and said, "I got $2 for my tooth...I know it was you mum." I felt really clever in my response, "You know if you don't believe anymore the toothfairy cant keep coming." (Hey it was only the 3rd lost tooth) He relpied, "Ok, I like the toothfairy," and prompty took his cereal saying no more.
If they dont know by the age of 8 or 9 I reckon its about time to have the cheerful 'your not going to miss out anyway' talk. I only say this because of the memory of a girl in year 6 aged 11 at school being teased ruthlessly by the other children in our class because she still believed in Santa. We were making Christmas Cards for our mums and dads at the time and I'll never forget how sad and demoralised that poor girl looked that day.