MTD and Property Income from Multiple Sources: What Landlords Need to Know

Many landlords do not have a single, simple rental income stream. If you own property jointly, hold both UK and foreign property, or combine rental income with self-employment, Making Tax Digital for Income Tax (MTD ITSA) has specific rules for how each source is treated. Getting this right determines whether you are in scope, when you must comply, and how you report each income stream.

How Multiple Sources Combine for the Threshold Test

Your qualifying income is the total of your gross self-employment income and your gross property income added together. HMRC assesses this figure against the relevant threshold to decide when you must start using MTD ITSA.

For Phase 1 (from 6 April 2026), the threshold is £50,000. Phase 2 (from 6 April 2027) brings in those with qualifying income above £30,000.

HMRC guidance confirms that sources combine: if you earn £25,000 from a rental property and £27,000 from self-employment, your qualifying income is £52,000 and you fall into Phase 1.

Crucially, the income used for this assessment is gross income before expenses, not profit. Even if your rental property runs at a loss after costs, the rental receipts still count.

What Counts as Property Income?

UK residential and commercial property income both count. Foreign property income also counts if you are UK tax-resident. HMRC guidance states that if you were UK tax-resident in the 2024/25 tax year, your qualifying income includes both your UK and foreign property income.

Income that does count includes:

• UK residential and commercial rental income
• Foreign rental income (if you are UK tax-resident)
• Property income from bare trusts where you are the beneficiary
• Property income from interest-in-possession trusts paid directly to you, bypassing trustees

Income that does not count includes:

• Income from UK Real Estate Investment Trusts (REITs)
• Income from Property Authorised Investment Funds (PAIFs)
• Your share of income from a partnership as an individual partner

Joint Ownership: How Your Share Is Calculated

If you jointly own a property, only your share of the rental income counts towards your qualifying income. HMRC guidance gives this example: a property generating £50,000 in rental income owned equally by two siblings gives each a qualifying property income of £25,000.

If you receive notice of your share of rental income after expenses have already been deducted (because a co-owner manages the accounts), HMRC will assess that net figure as your qualifying income for threshold purposes.

Multiple UK Properties

If you own several UK properties, all your UK property income is treated as a single business for MTD ITSA purposes. You do not file separate quarterly updates for each property. You keep one set of digital records covering all your UK property income and expenses and submit a single set of quarterly updates.

This is different from self-employment: each self-employment business is reported separately. If you are a landlord who is also self-employed, you will have at least two separate income streams to report.

UK Property and Foreign Property

If you hold both UK and overseas property, these are treated as separate income sources. Your software must support foreign property reporting as well as UK property. Check the software finder on GOV.UK to confirm a product handles both before you sign up.

Property Income Combined with Self-Employment

Having rental income and self-employment income means you have at least two separate reporting streams under MTD ITSA. You will need to:

• Keep separate digital records for your self-employment and your property income
• Submit quarterly updates for each stream
• Combine all sources in your final declaration at year end

If you have more than one self-employment business, each is reported separately too. HMRC guidance confirms this: each self-employment source and each property income type (UK, foreign) constitutes a separate income source that requires its own quarterly updates.

This matters when choosing software. Your MTD-compatible software must be capable of handling all your income sources. Not every product supports multiple self-employment streams or both UK and foreign property. Review the features carefully before committing.

Our MTD compliance guide lists recognised software options with notes on which income types they support.

Partnership Income and Qualifying Income

This is a common source of confusion. If you receive a share of profit from a partnership as an individual partner, that income does not count towards your qualifying income for the MTD ITSA threshold test.

However, you will still need to include your partnership profit share in your final declaration through your MTD-compatible software. The income is reported at year end; it is simply excluded from the quarterly update obligation and from the threshold calculation.

HMRC updated its guidance on this point in January 2026.

Ceased Income Sources

If a rental property was included on your 2024/25 Self Assessment return but you have since sold it or stopped renting it out, the income from it can still count towards your qualifying income for the threshold assessment. HMRC will include it if you still have at least one continuing source of self-employment or property income.

If all your self-employment and property income sources have ceased, you will not need to use MTD ITSA. You should inform HMRC.

Practical Steps if You Have Multiple Sources

1. List every income source you had in 2024/25 and identify whether it is self-employment, UK property, foreign property, or something else (dividends, PAYE, partnership profit).
2. Total up only the qualifying sources (self-employment gross plus property income gross) to check your threshold position.
3. Confirm your software supports every qualifying source you have, not just the largest one.
4. Understand that each source requires separate digital records and separate quarterly updates.

Our guide to what counts as qualifying income for MTD ITSA covers the threshold rules in more detail. The MTD for landlords guide explains the compliance obligations for property income in full.

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DigiTaxHub.co.uk is an independent information resource and is not affiliated with or endorsed by HMRC. This article is for information purposes only and does not constitute tax or financial advice. Always verify current rules at GOV.UK and speak to a qualified accountant if you are unsure.