... client does not have any control over capital which the interest is drawn from (hope this makes sense) so would this annual amount paid to client be treated as income or capital, me and our housing adviser beg to differ on this one so any thoughts greatly accepted and appreciated ...

thanx all and keep da faif bangin !

My vote is with income but I am open to be shot down in flames....

Subject to exceptions, the general rule is that income from capital is treated as capital. See Reg 34 of the HB Regs for the exceptions. The IS, JSA and CTB Regs have corresponding provisions.

Has to be Income, especially if client has no control or claim over capital amount. If its not something that can be realised then its not capital or arguable capital value nil.