Offshore accounts

I have a client who is resident ordinarily resident but non-domiciled in the United Kingdom. She is therefore taxed on her foreign income on the remittance basis. Her offshore portfolio manager who has set up two accounts one called 'capital' and one called 'income' each with a separate offshore banker.
The original capital was put into the capital account. The interest earned on the capital account is automatically transferred into the income account without physically being credited to the capital account.
The client only remits from the capital account never the income account and so whilst the balance on the capital account is decreasing by her remittances the amount on the income account is increasing. The portfolio manager believes these remittances are treated as capital and not income despite the income being from a continuing income-bearing source on the basis that the...