If you are 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, but 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.
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 totalled and submitted to HMRC in a quarterly update.
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.
If an individual qualifies, it is possible to combine the two easements, which 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.
Where an individual incurs residential property finance costs (such as mortgage interest), they must also create a separate digital record for these costs and send them separately from other expenses, even if taking advantage of an easement.
