Making Tax Digital and the non-resident landlord in 2026

The non-resident landlord is inside the regime, not outside it

Making Tax Digital for Income Tax became mandatory on 6 April 2026. The first population brought in is individuals, sole traders and landlords, whose gross income from self-employment and property exceeded £50,000 in the 2024 to 2025 tax year. The instinct of a landlord who lives abroad is that a UK digital-reporting regime is a domestic matter that does not reach them. It does. A non-resident individual who receives rent from UK property is within the scope of the regime in the same way as a UK-resident landlord, because the charge follows the UK property income, not the taxpayer's location.

What separates most non-resident landlords from an immediate quarterly-reporting obligation is not that they are outside the regime. It is that they are deferred inside it, and the deferral has a mechanism, a condition, and an expiry date that are worth understanding precisely, because the reprieve most of them are relying on is temporary and its end is already scheduled.

This note sets out what the regime demands, why a non-resident landlord is in scope, how the residence-page deferral actually works and when it ends, and the routes that sit outside the regime altogether.

What the regime demands, and the threshold that triggers it

Making Tax Digital for Income Tax is not a new tax. It is a change in how income is reported. An individual within it must keep digital records of their trading and property income and expenses, send HMRC a quarterly update through compatible software, and then make a final declaration after the tax year, in place of the single annual Self Assessment return.

The threshold is the part most often misread. The £50,000 figure is measured on qualifying income, which is the total gross income from self-employment and property, meaning turnover before any expenses are deducted, not taxable profit. A landlord with £55,000 of rent and £40,000 of allowable costs has a £15,000 profit but £55,000 of qualifying income, and is over the threshold. Whether they are in scope is decided by the gross figure, assessed by reference to the 2024 to 2025 return.

The threshold then falls in steps. From April 2027 it drops to £30,000 of qualifying income in the 2025 to 2026 tax year, and from April 2028 to £20,000 in the 2026 to 2027 tax year. Each reduction pulls a further tranche of landlords into quarterly reporting, so a landlord below the current threshold is not permanently outside the regime; they are ahead of a moving line.

The residence-page deferral, and its expiry

Here is the mechanism that keeps most non-resident landlords out of quarterly reporting for now, and here is why it is a deferral rather than an exemption.

Under HMRC guidance, an individual is deferred from Making Tax Digital for Income Tax if their tax return included the SA109 supplementary page, the residence, remittance basis and related page. The SA109 is the page a person completes precisely because they are non-resident in the UK for the year, among other reasons such as claiming split-year treatment or the foreign income and gains regime. In other words, the very document that marks a landlord as non-resident is the document that defers them.

The critical distinction is automatic against applied.

• Automatic deferral. If the SA109 page was included in the 2024 to 2025 return, the individual is automatically exempt from Making Tax Digital for Income Tax for the 2026 to 2027 tax year. No application, no contact with HMRC, nothing to file to claim it.
• Applied deferral. If the 2024 to 2025 return did not include the SA109 page, but the individual reasonably expects to include it in the 2025 to 2026 or 2026 to 2027 return, they must apply to HMRC for the exemption. It is not given automatically. A landlord who became non-resident more recently, and whose most recent filed return predates their departure, falls into this group and has to act.

The expiry is the point that the reassurance usually omits. This deferral lasts until April 2027 at the earliest. From the 2027 to 2028 tax year, a deferred individual whose qualifying income was above £30,000 in the 2025 to 2026 tax year is brought into Making Tax Digital for Income Tax. The residence page buys time; it does not remove the obligation. For a non-resident landlord with substantial UK rents, the honest reading is that quarterly digital reporting is arriving, and the deferral defines how long there is to prepare for it rather than whether it applies.

The routes that sit outside the regime

Deferral is not the only position. Some routes are outside Making Tax Digital for Income Tax entirely, and they matter to a landlord weighing how to hold UK property.

• Qualifying income of £20,000 or less is a permanent automatic exemption. A small portfolio held by an individual below that gross figure stays outside the regime unless the figure rises.
• No National Insurance number. An individual who does not have a National Insurance number before the start of the tax year is automatically exempt and cannot sign up, which affects some non-residents who never registered for one.
• The entity, not the individual. Non-resident companies that file an SA700, trusts that file an SA900, and personal representatives of a deceased person are all automatically exempt from Making Tax Digital for Income Tax. This is the most consequential point for a landlord facing the quarterly burden, because it means the reporting obligation attaches to the individual holding the property, not to property held through a company. The choice of entity therefore changes the reporting position, and the cost and consequence of moving property into a company is examined in the companion note on incorporating a UK property portfolio.

An individual who is exempt or deferred still has to file a normal Self Assessment return. The exemption removes the digital-reporting method, not the underlying obligation to report the income.

What this means for a non-resident landlord now

The position resolves into a short sequence. A non-resident landlord should first establish their qualifying income on the gross measure, because that, not profit, decides scope. They should then confirm whether their 2024 to 2025 return included the SA109 page, which decides whether their deferral is automatic or has to be applied for. And they should treat the deferral as a dated window, because from 2027 to 2028 the £30,000 line brings most of them in, and by April 2028 the line is at £20,000.

For a landlord whose portfolio is large enough that quarterly reporting is a real administrative cost, the window before April 2027 is also the time to decide whether the property should continue to be held personally at all, given that a company holding the same property is outside the regime. That is a structural question with its own tax consequences, not a simple switch, and it interacts with UK residence and the wider corridor position set out in UK tax when you live in Dubai and the rules on running a UK business from abroad.

Making Tax Digital did not exempt the non-resident landlord. It deferred him, put a date on the deferral, and left the decision about what to do before that date entirely in his hands.

Frequently asked questions

Does Making Tax Digital for Income Tax apply to non-resident landlords?

Yes. A non-resident individual who receives rental income from UK property is within the scope of Making Tax Digital for Income Tax, because the regime follows the UK property income rather than where the landlord lives. Most non-resident landlords are, however, deferred rather than immediately mandated, through the SA109 residence page, so the practical question is usually when they are brought in, not whether.

When did Making Tax Digital for Income Tax become mandatory?

It became mandatory on 6 April 2026 for individuals whose gross income from self-employment and property was over £50,000 in the 2024 to 2025 tax year. The threshold falls to £30,000 of qualifying income from April 2027 and to £20,000 from April 2028, so each year brings a further group of landlords and sole traders into the regime.

How is the £50,000 threshold measured for a landlord?

On gross income, not profit. The threshold looks at qualifying income, which is total turnover from self-employment and property before any expenses are deducted. A landlord with high rents and high costs can have a modest profit but still be over the threshold, because it is the gross rent that counts. The figure is assessed by reference to the 2024 to 2025 tax return.

Am I exempt from Making Tax Digital if I filed the SA109 residence page?

If your 2024 to 2025 tax return included the SA109 page, you are automatically exempt for the 2026 to 2027 tax year with no action required. If you did not include SA109 for 2024 to 2025 but reasonably expect to for 2025 to 2026 or 2026 to 2027, you must apply to HMRC for the exemption rather than receiving it automatically. The SA109 is the page completed by a non-resident, so it is the common route for landlords abroad.

How long does the SA109 deferral last?

Until April 2027 at the earliest. It is a temporary deferral, not a permanent exemption. From the 2027 to 2028 tax year, a deferred landlord whose qualifying income was above £30,000 in the 2025 to 2026 tax year is brought into Making Tax Digital for Income Tax. The residence page provides time to prepare; it does not remove the obligation.

Are companies and trusts subject to Making Tax Digital for Income Tax?

No. Non-resident companies that file an SA700, trusts that file an SA900, and personal representatives are automatically exempt from Making Tax Digital for Income Tax, which applies to individuals. This is why the choice of entity affects the reporting position: property held personally by an individual over the threshold is in scope, while property held through a company sits outside this particular regime, subject to the separate costs of using a company.

What happens if my rental income is £20,000 or less?

Qualifying income of £20,000 or less is a permanent automatic exemption from Making Tax Digital for Income Tax, unless your circumstances change and the figure rises. You do not need to apply for it. You must still report the income through a normal Self Assessment return, because the exemption removes only the digital quarterly method, not the duty to declare the income.

Do I still file a Self Assessment return if I am exempt or deferred?

Yes. Being exempt from or deferred out of Making Tax Digital for Income Tax removes the requirement to keep digital records and send quarterly updates through software. It does not remove the underlying obligation to report your income and gains, so you continue to submit a Self Assessment return as normal until you are brought into the digital regime.