Overseas landlords warned MTD relief may only be temporary

Prop Home is urging non-resident landlords with UK rental property to use the current Making Tax Digital deferral period to get records in order, warning many could still enter the regime from 6 April 2027. The company says the key risk is not the tax itself, but whether landlords can produce accurate digital records when they are brought into scope.

Why it matters: - Many overseas landlords with UK rental income may still face quarterly digital tax reporting from 6 April 2027. - Treating the current deferral as a permanent exemption could leave landlords unprepared if they later fall into Making Tax Digital for Income Tax. - Prop Home says the biggest practical issue is having accurate, accessible records ready for digital reporting.

What happened: - Prop Home warned that non-resident property owners should not assume they are permanently exempt from Making Tax Digital for Income Tax. - The Sheffield-based property manager said many landlords outside the regime for the 2026/27 tax year could still be brought into MTD from 6 April 2027, depending on their circumstances and income levels. - Founder Paul Harrison said many landlords may be seeing a deferral, not a permanent exemption.

The details: - Making Tax Digital for Income Tax requires eligible individuals to keep digital records and submit information to HMRC using compatible software. - Prop Home says it does not provide tax advice and is not commenting on any individual tax position. - The company says the change highlights the need for reliable property records, especially for landlords managing UK property from overseas. - Prop Home says it helps landlords and their advisers by providing records of rent collection, maintenance expenditure, contractor invoices and management costs. - Harrison said property managers, accountants and landlords each have different roles. - Harrison also said tax advice should come from a suitably qualified tax professional. - Many non-resident landlords whose 2024/25 Self Assessment return included SA109 residence information are currently exempt from MTD for the 2026/27 tax year. - Prop Home said that exemption may not continue in future years. - The company noted that MTD operates separately from the Non-Resident Landlord Scheme, so some landlords could be affected by both.

Between the lines: - The warning is less about a policy change today and more about avoiding a false sense of security. - Prop Home is framing record keeping as the key operational task, since future compliance may depend on whether landlords can quickly produce clean digital data. - The message also signals that overseas landlords may need joined-up planning across letting agents, property managers and tax advisers.

What's next: - Prop Home is urging overseas landlords to use the period before April 2027 to update property and tax records. - Landlords should check whether their income could bring them within future MTD thresholds and whether any exemption is temporary or continuing. - Prop Home recommends that landlords discuss software and reporting requirements with a qualified accountant or tax adviser. - The company also says landlords should make sure letting agents or property managers provide clear records of rental income and expenditure. - Harrison said landlords who spend the extra year organizing their records will be in a stronger position if they later enter Making Tax Digital.

The bottom line: - The current MTD deferral looks more like a countdown than a carveout for many overseas landlords.