Making Tax Digital (MTD) : Rules for Landlords from 6 April 2026Written on April 8, 2025 by Kirk Rice LLP
Landlords of UK and overseas rental properties or individuals receiving other sources of income from property who meet the £50,000 gross income test (including income also earned through an unincorporated self employment sole trade business) will be brought within the scope of MTD.
This will affect individuals with the following sources where the aggregate of these sources exceeds £50,000 gross (before the deduction of expenses), although this threshold falls to £30,000 gross from 6 April 2027, and to £20,000 gross from 6 April 2028:
- Rental income from UK rental properties
- Other UK property income such as reverse premiums or income from the grant of a lease
- Rental income from foreign rental properties
- Other foreign property income such as the receipt of premiums
HMRC will be writing to individuals whom they believe may be affected by the new rules. The trigger year for the £50,000 threshold is 2024/25 (ie if your combined gross income from any of the above sources in this year is above £50,000, then you will be caught by the new rules). The trigger year for the £30,000 threshold is 2025/26, and for £20,000 is £2026/27.
Property income which is not normally reported on a tax return because it is covered by the Rent-a-Room relief (currently £7,500), or the property allowance (currently £1,000) does not count towards the MTD gross income threshold. If, however, the individual is required to join MTD because they exceed the gross income threshold (due to their other property income and/or self-employment income), then they will need to comply with the quarterly reporting obligations in respect of all their sources of property and/or self-employment income (including that covered by Rent-a-Room relief or the property allowance).
For properties that are jointly owned, it is the individual’s share of the rental income that is used to test whether or not the gross qualifying income threshold is exceeded.
Non-UK residents with a National Insurance number will only be mandated to MTD from April 2027, even if their gross qualifying income is above £50,000 in 2026/27.
Where an overseas landlord has a UK rental property, but does not have a National Insurance number, they will be outside the scope of MTD and will continue to declare their UK rental income in their annual UK self assessment tax return.
Details of the registration process will follow once clarified by HMRC.
More information concerning MTD will be made available here as and when it is published by HMRC. If you are a client of Kirk Rice LLP we will be contacting you over the course of this year to discuss these changes and the options available to you. Please bear with us whilst we work through the impact of these changes.
You can find out more on the Government website.
Please note: This article is correct as at the publication date. The answers are given for general guidance only and specific advice should be taken before acting on any of the suggestions made. The information is based on current tax legislation which may change in future. Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of relief from taxation are subject to change.
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