What is income?

FIREDreamer

How about high yielding shares in an ISA? A few pay 8% dividends and more.

Nick_Dr1

[Deleted User] said:

Nick_Dr1 said:

[Deleted User] said:

Money taken out of an ISA is not income. Interest and dividends (but not capital gains) that arise in an ISA are income. 

Another way of looking at it is that it would be pointless to bother with the word 'income' in the legislation if you could just transfer money between two of your own bank accounts and create income. 

"When it comes to gifting those withdrawals, the IHT rules also help here. The 'normal expenditure out of income' exemption doesn't use the income definition used for income tax purposes. As income is not defined in the IHT Act, it follows normal accountancy practice to determine what is income. "(From the link previously mentioned)

So as you point out, it is pointless to bother with the word income, so they haven't. We have to think about normal accountancy practice when we define income. How does that relate to ISAs then? They are free of income tax and CGT.  

I give up.

I'm obviously not getting it. I'll give up as well. It wasn't a serious proposition anyway.