HMRC MTD

mountainleedsman

A couple of questions regarding MTD

1. Is HMRC informing tax payers if they have to submit quarterly returns or not?

2) My combined income from state and work pensions PLUS Gross rental income takes me into the 40% tax band. Expected gross rental income 26/27 is ca. £45,000 My understanding is that I do not have to do MTD until 27/28 . Is this correct?

3) My wife has expected gross rental income of £18,000 in 26/27 so will not have to register for MTD until 28/29. Am assuming rent increase and static limit of £20,000

4) Can not see any advantage of putting more houses in joint names as any income tax advantage and/or delaying MTD will be outweighed by cost of stamp duty and legal fees. Is this correct

poseidon1

https://forums.moneysavingexpert.com/discussion/6662828/hmrc-mtd

Answer to your 1st question is yes, see below:

https://www.litrg.org.uk/news/hmrc-write-taxpayers-month-about-making-tax-digital#:~:text=need%20to%20do?-,Why%20are%20HMRC%20writing%20to%20taxpayers?,Making%20Tax%20Digital%20information%20hub.

From what you have stated, there is no reason for you to expect such a letter until the advent of the 27/28 tax year.

If you and your wife fundamentally object to being subject to MTD in the near future, you could explore restructuring your exsisting sole proprietor rental properties into a jointly owned partnership arrangement on the basis that partnerships ( for the time being) are not caught by MTD.

You are of course correct that adding new properties to your exsisting portfolio is unattractive from the point of view of SDLT and higher rate income tax for long standing reasons unconnected to MTD.

No doubt someone will chip in eventually and suggest considering a limited company for future purchases (I make no such suggestion for various reasons).

LITRG

Hi OP. You may find the following sections of our MTD information hub helpful:

When does Making Tax Digital start for me? | Low Incomes Tax Reform Group

Making Tax Digital for landlords | Low Incomes Tax Reform Group

We have also just uploaded a video to our YouTube channel which sets out the basics about the scheme.

What is Making Tax Digital for Income Tax? - YouTube

Hope this is helpful.

Jeremy535897

https://forums.moneysavingexpert.com/discussion/6662828/hmrc-mtd

What matters at the moment is what your gross rental income was for 2024/25. if that was under £50,000, and you have no self employment income, then you don't have to sign up to MTD for 2026/27. Signup for 2027/28 will be based on 2025/26 gross rents, and if they exceed £30,000, you will be in MTD for 2027/28.

Diaz09

Just a heads up - HMRC won't automatically notify you about MTD obligations, so it's really worth keeping track of your rental income yourself! One thing that often catches people out is that the thresholds are based on gross rental income before any allowable expenses, so make sure you're calculating from the right figure. Since you're both approaching the thresholds in different tax years, it might be worth reviewing whether joint ownership would actually help spread the income more effectively over time.

sh_clearmtd

From what you've described I don't think you'd be caught by MTD for 2026/27. The threshold for the first year is £50k gross from self-employment or property, and at £45k rental income you're under that.

The catch is April 2027 when it drops to £30k — at that point you'd be in scope.

Few things worth knowing:

- it's gross rental income that counts, not profit after expenses

- pension income (state or private) doesn't factor into the MTD threshold at all, it's only self-employment and property

- the fact you're in the 40% bracket overall doesn't matter, it's the property/SE income on its own

So you've got about a year before you need to worry. Might be worth getting set up during 2026/27 voluntarily though so you're not scrambling when the lower threshold kicks in.

On HMRC's communication — yeah it's been poor. The mandation letters only went to people above £50k. You'll probably get one next year.