Making Tax Digital Easements: What Joint Property Owners Need to Know
Last updated: February 2026
If you own rental property jointly with your spouse, a family member, or a business partner, Making Tax Digital for Income Tax includes specific easements designed to simplify your quarterly reporting obligations. These easements recognise that jointly held property creates particular complications under MTD, and they reduce the burden of quarterly updates significantly. Understanding what is available to you could save hours of record-keeping work every quarter.
How joint property ownership works under MTD
Under MTD for Income Tax, each individual reports their own share of jointly held property income. If you and your spouse own a rental property equally, you each report 50% of the gross income. HMRC treats each co-owner as a separate taxpayer with separate quarterly update obligations.
This means that both you and your co-owner must maintain digital records, submit quarterly updates, and file a Final Declaration at year-end. Without the easements, each of you would need to categorise every expense, maintain detailed digital records, and submit full breakdowns of income and expenditure every quarter. For many joint property owners, that level of detail feels disproportionate to the simplicity of their affairs. The three easements available address exactly this problem.
Easement 1: Simplified digital records
The first easement allows joint property owners to keep less detailed digital records than would normally be required under MTD. Under the standard rules, you must record each transaction with the date, amount, and category of income or expense. For jointly held property, the simplified records easement means you do not need to maintain the same level of granular categorisation.
In practice, this means you can record your share of the total rental income and your share of the total expenses without breaking expenses down into the individual categories (repairs, insurance, agent fees, mortgage interest, and so on) that the standard rules require. You still need to keep records that support your tax position, but the digital records themselves can be simpler summaries rather than line-by-line transaction logs.
This easement is particularly useful for landlords whose letting agent handles rent collection and pays certain expenses on their behalf. Rather than extracting and categorising every individual line item from monthly agent statements, you can record the summary figures.
Easement 2: Quarterly income-only reporting
The second easement is arguably the most practical. Joint property owners can submit quarterly updates that contain only their share of the rental income, with no expenses reported until the year-end Final Declaration. Under the standard MTD rules, quarterly updates must include both income and expenses. This easement removes the expense reporting requirement from the quarterly cycle entirely.
The benefit is straightforward. Many property expenses are irregular. A boiler repair happens in November. Insurance renews in March. Letting agent fees vary month to month. Tracking and categorising these expenses on a quarterly basis creates work that, for many joint property owners, adds little value. The income-only easement lets you report just the rental income each quarter and deal with expenses once a year.
Your expenses are still claimed. Nothing is lost. You simply report them in the Final Declaration by 31 January following the end of the tax year, rather than splitting them across four quarterly updates. For more on the penalties framework and quarterly deadlines, see our separate guide.
Easement 3: Three-line accounts
The third easement allows joint property owners to report their property income using three-line accounts. This means your submission contains just three figures: total income, total expenses, and the resulting profit. There is no requirement to break expenses down into categories such as repairs, insurance, professional fees, or any other heading.
Three-line accounts are not new to MTD. They already exist under Self Assessment for businesses with turnover below the VAT registration threshold, currently £90,000 from 1 April 2024. The same turnover limit applies under MTD. If your share of the gross property income is below £90,000, you can use three-line accounts for your quarterly updates and your Final Declaration.
For most joint property owners, this threshold is comfortably above their income share. A jointly owned portfolio would need to generate £180,000 in gross rent before a 50/50 co-owner exceeded the limit. Very few residential landlords in the UK are in that position.
Combining the easements
These three easements are not mutually exclusive. You can combine them to reduce your quarterly reporting to its absolute minimum. A joint property owner who uses all three easements together would keep simplified summary records, report only their income share in quarterly updates (no expenses), and present that income as a single total figure rather than a categorised breakdown.
The most common combination is income-only quarterly reporting with three-line accounts. This means your quarterly updates contain a single figure: your share of the total rental income for the quarter. No expense categories, no detailed breakdowns, no complex categorisation. Expenses are then reported at year-end as a single total in the Final Declaration.
For a landlord with a straightforward portfolio, this combination reduces each quarterly update to a matter of minutes. You check your share of the rental income for the quarter, enter one number, and submit.
What happens at year-end
If you use the income-only quarterly reporting easement, your expenses need to be reported in the Final Declaration. This is due by 31 January following the end of the tax year, the same deadline that currently applies to Self Assessment tax returns.
If you are also using three-line accounts, your year-end expense reporting remains simple: a single total expenses figure. You do not need to categorise expenses at year-end either. You report total income, total expenses, and profit, and that is your complete submission.
If you are using the income-only easement but not three-line accounts (perhaps because your income exceeds £90,000), you will need to provide categorised expenses in your Final Declaration. The quarterly burden is still reduced, but the year-end submission requires more detail.
Worked example: Rob and Claire
Rob and his wife Claire jointly own two rental properties in Manchester. The properties generate £38,000 gross rental income per year between them. They split the income equally, so each reports £19,000 on their tax return. Both are above the £50,000 qualifying income threshold because Rob has self-employment income of £40,000 and Claire has self-employment income of £35,000 alongside her property share.
Without the easements, each of them would need to maintain detailed digital records of every property expense, categorise those expenses, and include them in quarterly updates alongside their rental income. They would need to separate repairs from insurance, agent fees from mortgage interest, and report each category every quarter.
With the easements, their quarterly property reporting looks like this:
| Quarter | Period | Rob reports | Claire reports |
|---|---|---|---|
| Q1 | 6 April to 5 July | £4,750 income | £4,750 income |
| Q2 | 6 July to 5 October | £4,750 income | £4,750 income |
| Q3 | 6 October to 5 January | £4,750 income | £4,750 income |
| Q4 | 6 January to 5 April | £4,750 income | £4,750 income |
Each quarterly update for the property income contains a single figure. No expenses, no categories. At year-end, Rob and Claire each report their property finances using three-line accounts in the Final Declaration: £19,000 total income, £6,200 total expenses, £12,800 profit. Their MTD-compatible software handles the submission to HMRC.
Note that these easements apply to their property income only. Rob and Claire each have separate self-employment income that must be reported under the standard MTD rules with full quarterly detail. The easements are specific to jointly held property.
Who qualifies for these easements
The easements are available to anyone who receives income from property that is held jointly with one or more other people. This includes married couples and civil partners who co-own property, family members who have inherited a property together, and unrelated individuals who have bought property as an investment partnership.
The three-line accounts easement has an additional condition: your share of the gross property income must be below the VAT registration threshold of £90,000. The simplified records and income-only reporting easements do not have an income cap.
There is no requirement to formally apply for these easements. You simply use them when submitting your quarterly updates. Your software should support these reporting options, and your accountant can configure the submissions accordingly.
FAQ
Do both joint owners have to use the same easements?
No. Each co-owner is a separate taxpayer and can choose independently which easements to use. One could use income-only quarterly reporting while the other reports full income and expenses each quarter.
Can I use these easements for property I own on my own?
No. These specific easements are for jointly held property only. If you are the sole owner of a rental property, the standard MTD reporting rules apply. Three-line accounts remain available for sole owners with turnover below £90,000, but the simplified records and income-only quarterly reporting easements are specific to joint property.
Do the easements apply to the first year of MTD in 2026/27?
Yes. The easements are available from the start of MTD for Income Tax on 6 April 2026 for those with qualifying income above £50,000, and from 6 April 2027 for those above £30,000.
What if our property income is split unequally?
The easements apply regardless of how the income is split between co-owners. If you own property 70/30 with your spouse, each of you can use the easements for your respective share. The £90,000 three-line accounts threshold applies to each individual’s share, not the total property income.
Do I still need to keep receipts if I use simplified records?
Yes. The simplified records easement reduces the detail required in your digital records, but HMRC can still ask for evidence to support your claimed expenses. Keep all receipts, invoices, and letting agent statements as you normally would.
Need help with MTD for your jointly owned property?
Jack Ross Chartered Accountants can advise you on which easements apply to your situation and set up your quarterly reporting accordingly. If you want to manage your property income through cloud accounting, our Xero team can configure everything for MTD compliance with the easements built in. Contact us to discuss your property reporting ahead of April 2026.
