Landlords with foreign properties

Do you have a flat in Spain or a cottage in France that you rent out and for which you need to make Making Tax Digital for Income Tax (MTD IT) quarterly reports? In March, significant simplifications were announced to the level of information required for foreign properties, such that the MTD IT record-keeping requirements now differ to those for UK properties.

For a UK property business, taxpayers in MTD IT have to keep fully categorised income and expense records (ignoring certain possible easements). In contrast, the requirements for foreign properties are much simpler, with currently just three categories:

• Total rent/other receipts;
• Premiums for grant of a lease; and
• Allowable expenses.

HMRC will subsequently add a separate expense category to cover residential letting finance costs, so it is worth keeping these recorded separately in digital records. No doubt there will be further amendments to the detailed rules as MTD IT beds in.

Sole traders and landlords already mandated into MTD IT should by now have filed their first return, as the deadline was 5 August.

Please get in touch with the team if you are still unsure as to whether you need to make MTD IT returns or if you are having difficulties in getting to grips with this new digital process. We are here to help.