21.—(1) Any income derived from capital to which the applicant is or is treated under regulation 50 (capital jointly held) as beneficially entitled but, subject to sub-paragraph (2), not income derived from capital disregarded under paragraphs 3, 4, 6, 10, 16 or 30 to 33 of Schedule 5.
(2) Income derived from capital disregarded under paragraphs 4, 6 or 30 to 33 of Schedule 5 but only to the extent of—
(a)any mortgage repayments made in respect of the dwelling or premises in the period during which that income accrued; or
(b)any council tax or water charges which the applicant is liable to pay in respect of the dwelling or premises and which are paid in the period during which that income accrued.
(3) The definition of “water charges” in regulation 2(1) (interpretation) applies to sub-paragraph (2) with the omission of the words “in so far as such charges are in respect of the dwelling which a person occupies as a home”.