Making Tax Digital (MTD) for Income Tax will change how landlords report rental income, including couples who jointly own property. From April 2026, many landlords will be required to keep digital records and submit quarterly updates to HMRC instead of relying solely on an annual Self Assessment return. This creates important considerations for couples receiving joint rental income.

Understanding Joint Property Income

Where a property is jointly owned, HMRC normally treats income as split equally between spouses or civil partners, regardless of the actual ownership percentage. This means each person reports 50% of the rental profit on their tax return. However, couples can elect to be taxed based on beneficial ownership if they hold unequal shares and submit Form 17 with supporting evidence such as a Declaration of Trust.

How MTD Applies to Couples

Under MTD for Income Tax, each individual owner is responsible for their own digital record keeping and submissions. Even if income comes from the same property, HMRC views each person as a separate taxpayer. As a result, both partners may need compatible software and must submit their own quarterly updates showing their share of income and expenses.

This is a key change for couples who previously relied on one partner or accountant managing everything centrally. MTD introduces a dual-reporting approach where both individuals must remain compliant.

Digital Record Keeping Requirements

Couples will need to maintain digital records of rental income and allowable expenses throughout the year. This includes rent received, mortgage interest (restricted relief rules still apply), repairs, insurance, agent fees and other deductible costs. Records must be maintained in functional compatible software or bridging solutions that can submit data directly to HMRC.

Importantly, records should reflect each partner’s share rather than total property figures unless software automatically apportions entries.

Quarterly Updates and End of Period Statements

Each partner will submit quarterly summaries to HMRC showing their share of property income and expenses. These updates are cumulative and designed to provide HMRC with a real-time picture of taxable profits. After the tax year ends, individuals will complete an End of Period Statement (EOPS) to finalise property income adjustments and then submit a final declaration confirming overall tax liability.

Planning Opportunities for Couples

MTD may encourage couples to review ownership structures and income splits ahead of April 2026. Where one partner pays higher tax, transferring beneficial interest (with professional advice) could improve overall tax efficiency. Couples should also consider whether existing spreadsheets remain suitable or if dedicated software will provide better compliance and automation.

Early preparation is crucial, as waiting until MTD becomes mandatory could create administrative pressure and increase compliance risk.

Final Thoughts

MTD represents a significant shift for landlords, particularly couples with joint property income. Although the underlying tax rules on income allocation remain unchanged, reporting responsibilities will become individualised and digital. Ensuring ownership structures are clear, records are accurate and software solutions are in place will help couples transition smoothly into the new regime.

If you own rental property jointly and want to understand how MTD will affect your reporting obligations, professional guidance can help you prepare in advance and avoid surprises.

Need Help:
If you receive rental income from jointly owned property and want to prepare for Making Tax Digital, now is the time to act. Our team can review your ownership structure, advise on Form 17 where relevant, and help you choose compliant software so both partners meet HMRC requirements with confidence.