If you own rental property jointly with someone else, Making Tax Digital looks more complicated than it is. The worry usually goes something like: do we both report everything? Does one of us do it? How do we split the expenses every three months? Do we have to send each other receipts?
The short answer is that you only ever report your own share, in your own submission, and HMRC has two specific relaxations that exist purely to stop joint owners having to swap paperwork every quarter. Most landlords who own with a partner are doing more work than they need to.
Here is how it actually works.
You report your share, and only your share
HMRC treats each owner completely separately. You report your share of the income and expenses under your own National Insurance number. Your co-owner reports theirs under theirs. The two halves are never added together in one place, and you never name the other person in your submission.
So if you and your wife own a flat 50/50 that brings in £12,000 a year, you report £6,000 and she reports £6,000. Neither of you reports £12,000.
That sounds obvious once it is written down, but it is the single most common thing landlords get wrong when they first upload their figures to software. Spreadsheets are usually kept for the whole property, because that is how the money actually arrives. The submission wants your half.
All your properties count as one business
This is the other thing that catches people out. HMRC does not want a property-by-property breakdown. Every UK rental property you own is treated as a single UK property business, and your quarterly update carries one set of totals for the lot.
There is nowhere to list individual properties and nowhere to record an ownership share. So if you own three properties on your own and two with your partner, you add together:
- 100% of the income and expenses from the three you own outright, plus
- your share of the income and expenses from the two you own jointly
That combined figure is what you report. One number for income, then your expenses.
Relaxation one: you do not need to record every transaction
HMRC has published a specific relaxation for jointly let property. For your share of a jointly let property you can keep:
- one entry for each category of income, per quarter
- one entry for each category of expense, for the whole tax year
Read that second one again, because it is the useful bit. For jointly owned property, expenses only need one record per category for the entire year, not per quarter and definitely not per transaction. You are not required to keep a digital record of every individual invoice for a jointly held property.
This is set out in HMRC’s digital record-keeping notice, which applies to anyone with “property income and profits from a jointly let property”.
Relaxation two: you can leave expenses out of your quarterly updates
This is the big one, and hardly anybody knows about it.
HMRC’s guidance says that for jointly let properties, in your quarterly updates you can choose to include either property income and expenses, or property income only.
If you choose income only, you are not skipping anything or filing something incomplete. You simply report the expenses after the tax year ends, by resending your fourth quarterly update before you submit your tax return. Quarterly updates are designed to be replaceable, so sending an updated version is a normal part of how the system works rather than a correction.
Why does this exist? Because HMRC recognised that working out your share of expenses every three months would mean joint owners posting records back and forth to each other four times a year, for no real benefit. So they removed the requirement.
In practice this means a couple who own rentals together can report the rent as it comes in each quarter, and deal with the expenses once, properly, at the end of the year. That is a lot less admin than most people assume they have signed up for.
You can read this in HMRC’s guidance on sending quarterly updates.
One practical note if you are doing this in aligned.tax. Rather than leaving the expenses cell empty, put 0 in it for now. Software cannot tell the difference between “I have no expenses to report yet” and “I forgot to fill this in”, so we ask for the zero deliberately, to be sure it is what you meant. Then when you resend your fourth quarterly update at the year end, you replace that 0 with the real figures.
Your share might keep you out of Making Tax Digital entirely
Making Tax Digital only applies once your qualifying income goes above the threshold. For jointly owned property, only your share counts.
HMRC’s own example: a jointly owned property producing £50,000 of income, owned equally, gives you £25,000 of qualifying income, not £50,000.
So a couple with a portfolio turning over £70,000 between them might each have £35,000 of qualifying income, and each be assessed on that figure alone. The gross rent roll is not the test. Your half is.
There is one more detail worth knowing. HMRC says that if you jointly own a property and only receive notice of your share of the income after expenses have been deducted, they will assess that after-expenses figure for your qualifying income. If the only figure you ever see is a net one, that net figure is what counts.
If you are not sure which side of the line you fall on, our MTD start date checker works it out from your own share and tells you when, or whether, you need to start.
You may only need two numbers
One last simplification that stacks on top of everything above. If your rental income is under £90,000, you can report a single combined figure for all your expenses instead of splitting them into categories like repairs, insurance and professional fees.
Combine that with the relaxations above and a joint owner’s quarterly update can be as small as:
- total rental income (your share)
- total expenses (your share), or simply 0 until the year end
One thing to watch: HMRC will not accept a mixture. It is either the single combined figure or the itemised categories, not some of each in the same submission.
What this looks like in practice
Say you own two flats on your own and one house jointly with your wife, and your rental income is comfortably under £90,000.
Your spreadsheet can stay exactly as it is, property by property, because that is your working record and it is genuinely useful. All you add is one extra tab holding the figures you actually submit:
| Your share | |
|---|---|
| Rental income | 100% of both flats, plus half the house |
| Total expenses | 100% of both flats, plus half the house |
Two numbers. Your wife keeps her own spreadsheet, or her own tab, with her half of the house and nothing else.
Then each of you sends your own quarterly update, under your own National Insurance number, from your own software.
The bit we cannot help with
We are bridging software, not accountants. We can take the figures from your spreadsheet and send them to HMRC in the right shape, and we can tell you what the software will and will not accept.
What we cannot tell you is what your share actually is. Most couples own 50/50 and that is the default position for married couples and civil partners, but beneficial ownership can be split differently, and where it is, there is a separate HMRC process for declaring it. That is a question for a qualified accountant or tax adviser, not for us and not for a blog post.
If you are confident about your share, the rest is genuinely straightforward.
In short
- You report your share only, in your own submission, under your own National Insurance number
- All your UK properties count as one property business, with one set of totals
- For jointly let property you can keep one expense record per category for the whole year
- You can send income only in your quarterly updates, entering 0 for expenses, and add the real figures at the year end by resending your fourth update
- Only your share counts towards the threshold that decides whether you are in Making Tax Digital at all
- Under £90,000 of rental income, expenses can be a single combined figure
Making Tax Digital for jointly owned property is one of the few corners of the regime where HMRC has genuinely made things simpler rather than harder. It is worth knowing about before you start building complicated quarterly spreadsheets you do not need.