In-app purchasing problems. Multiple Apple ID problem

Having recently acquired an iPhone 5 I have erased my existing iPhone 3GS so that I can give it to my son (so he can play games on it). I set up the iPhone 3GS so that it is essentially his own phone with his own new Apple ID. However when I try and buy any in apps purchases for the phone I get the following message:

Unable to purchase

This item is for an app that was purchased by a different Apple ID. To buy this item with this Apple ID, you must first purchase the app.

So I'm confused? Is it because when I downloaded  the app in iTunes I was downloading it with my Apple ID and not my new sons one. How do I rectify this problem?

Richard