If you own a rental property with someone else, be it a spouse, partner, family member or business partner, you might be wondering who is responsible for reporting it under the new Making Tax Digital rules. Here, we break it down clearly in jargon-free English.
How joint property ownership works for tax
If you jointly own a rental property, each owner is responsible for reporting their share of the income and expenses. This means:
- You don’t submit one combined return
- Each person submits their own quarterly updates and final tax return
- You only report your percentage share
How is income split?
Typically:
- Married couples and civil partners: 50/50 by default
- Business partners: based on ownership agreement
- Family members: based on legal ownership
So if your rental income is £12,000 annually and you own 50%, you report £6,000.
How are expenses split?
Expenses are usually split in the same proportion as ownership. So, if you own 50%, you claim:
- 50% of mortgage interest
- 50% of repairs
- 50% of letting agent fees
- 50% of maintenance costs
How does quarterly reporting work for joint owners?
Each owner is required to submit their own quarterly update, their own income totals and their own expense totals. This means you don’t need to combine reports or file jointly. Each person reports their share only.
What about different ownership percentages?
If ownership isn’t 50/50, you simply report your actual ownership. And if one person manages everything such as collecting the rent, paying bills and managing agents, each owner must still report their personal share.
Do both owners need MTD-compatible software?
Yes. This is because each joint owner must keep digital records, submit quarterly reports and therefore use compatible software. Ultimately, both people need their own reporting solution.
Mistakes to avoid
- Reporting full income instead of your share
- Claiming 100% of expenses
- Submitting combined updates
- Only one owner reporting
How Coconut can help
Coconut lets you:
- Track rental income
- Split expenses accurately
- Automatically calculate your share
- Prepare quarterly summaries
- Submit MTD updates easily
This removes confusion, prevents errors and keeps both owners fully compliant.
Joint property ownership under MTD may sound complicated, but it follows one simple rule: you report your share - no more, no less. What’s more, with digital tools and clear records, it can actually become straightforward and stress-free.
