Joint landlords: Making Tax Digital counts only your share

Joint owners of a let flat are each tested on their own share of the rent for Making Tax Digital. From April 2027 the line is £30,000 a person, not a property.

Two people who own a let flat together are tested separately for Making Tax Digital. Each counts only their own share of the rent, so a flat bringing in £42,000 a year can leave both owners outside the £30,000 line that applies from 6 April 2027.

In London, where one flat can carry a rent that sounds well over the limit, that is easy to miss. HMRC looks at people, not properties.

The test is per person

Making Tax Digital for Income Tax means keeping digital records and sending HMRC an update every quarter through software, as well as filing a tax return. HMRC's timetable brought in people with qualifying income over £50,000 in 2024 to 2025 from 6 April 2026. Next come those over £30,000 in 2025 to 2026, from 6 April 2027, then those over £20,000 in 2026 to 2027, from 6 April 2028.

Qualifying income is your rent and self-employment takings before expenses. Salary, pensions and dividends do not count. For a jointly owned property, HMRC's guidance on qualifying income is plain: "Your share of the property income will count towards your qualifying income." Its own example is a property owned with a sibling that brings in £50,000, shared equally. Each sibling's qualifying income is £25,000.

One flat, two answers

Illustration, not a real client. Two sisters own a flat in Islington in equal shares. It lets for £3,500 a month, £42,000 a year. Both have salaries, and neither has other rental or self-employment income.

The whole flat: £42,000, which looks over £30,000.
Each sister's share: £21,000.
From 6 April 2027: neither is in, because £21,000 is under £30,000.
From 6 April 2028: if 2026 to 2027 looks the same, both are in, because £21,000 is over £20,000.

Now change one detail. One sister also runs a photography business that took £12,000 in 2025 to 2026. Her qualifying income is £33,000 and she starts in April 2027. Her sister does not. Same flat, two start dates.

So the useful question is not whether the flat is in Making Tax Digital. It is what each owner brings in, from rent and any business, before expenses.

Married couples and Form 17

The share that counts is the one on your tax return, and for married couples and civil partners who live together there is a default. Income from property they hold in joint names is taxed 50/50, even if they own it unequally.

They can be taxed on their real shares only by sending HMRC a Form 17 declaration, and only where they genuinely own the property in unequal shares and take the income in the same proportions. The form must reach HMRC within 60 days of the last signature and works only from that date forward. HMRC's manual says there is no power to extend the 60 days. It records who owns what; it is not a dial for setting tax. There is more on how Form 17 splits rental income between spouses.

Other co-owners, such as siblings or unmarried partners, are taxed on the share of the profits they actually receive or are entitled to.

Lighter rules for joint lets

If one of you is in, HMRC's rules for jointly let property are lighter than for a property you own outright. You can:

record only your share of the income and expenses;
keep one record for each quarter's rent rather than one for every payment;
leave the joint property's expenses out of your quarterly updates and add them after the year ends, by resending your fourth update before you file.

You do not need to link your records to your co-owner's. The first question is still whether your own share takes you over the line. The £30,000 test for landlords from April 2027 explains what counts towards it and which year decides.

What to do before January

Work out your own 2025 to 2026 figure: your share of the gross rent plus any self-employment takings. That return is due online by 31 January 2027, and it decides April 2027.
Check that the split on your return matches how you really own the property and receive the rent. A married couple who own unequally but have no valid Form 17 should be reporting 50/50.
If your share is near £20,000, plan for April 2028 now. The year that decides it, 2026 to 2027, is already half gone.
Do not wait for a letter. HMRC writes to people it finds over the threshold, but says that checking is still your responsibility.

Two people with one flat can be on two different timetables. Each owner should check their own number first, then compare notes.

About the author

Harvey Dhillon is the founder and CEO of Zmartly, a UK accountancy firm for small businesses. He grew up in West London and worked in finance roles in investment banking, wealth management and private equity, starting at Barclays, before leaving in 2020 to build the firm. He is a Chartered Management Accountant (ACMA, CGMA).

Featured photo by Matt Pictures on Unsplash.