Are you managing property investments with co-owners? If you’re a sole trader or landlord with combined turnover from trade and property exceeding £50,000 in 2024/25, you’re likely to be mandated into Making Tax Digital (MTD) from 6 April 2026. Individuals with lower income will be mandated at later dates.

We have covered the general MTD requirements in previous newsletters. Now it’s time to focus on how MTD will apply to those with income from property that is jointly owned by more than one person.

Understanding the Standard Requirements

The MTD legislation prescribes the various categories that should be used to record each individual item of income and expenditure. Any MTD-compatible software package or spreadsheet should enable you to categorise income and expenditure according to the prescribed categories for jointly held property income.

Each quarter, year-to-date totals for each category will be totaled and submitted to HMRC in a Quarterly Update.

Two Key Easements Available

There are two easements that individuals with jointly held property income can take advantage of:

• Easement for individuals with turnover below £90,000 per annum – instead of using the various categories, it will be sufficient to categorise each item as either ‘income’ or ‘expense’
• Easement for jointly held property income – this involves recording just one quarterly figure for each of the prescribed income categories and one annual figure for each of the prescribed expense categories

Combining Both Easements

If an individual qualifies, it is possible to combine the two easements. This would mean that reporting income from jointly held property would entail entering one total income figure each quarter and one annual total expense figure in quarter 4.

These articles are for guidance only and professional advice should be obtained before acting on any information contained in them. No responsibility can be accepted for loss occasioned howsoever to any person as a result of action taken or refrained from as a result of reading.