Does Making Tax Digital apply to non-resident landlords?

It can. Non-residents can be exempt for 2026-27, and the 28 October 2026 Budget said people expected to be non-resident will stay exempt until further notice, with regulations due before April 2027.

Making Tax Digital for Income Tax (MTD) means keeping digital records and sending HMRC quarterly updates from compatible software. Living abroad changes which income counts, and it gives many people more time before they start. This page follows GOV.UK and the Income Tax (Digital Obligations) Regulations 2026, as checked on 16 October 2026, plus the 28 October 2026 Budget announcement.

Who has to use MTD

GOV.UK says you need MTD if you are a sole trader or landlord registered for Self Assessment, you get income from self-employment or property, and your qualifying income is over the threshold for the year. Qualifying income is that income before expenses. Where you live does not take you out of the test, but your tax residence changes which income counts.

How residence changes what counts

GOV.UK's example is someone tax resident in Spain who rents out a UK property and is a sole trader in Spain. Only the UK rent counts. If you own a UK property jointly, only your share of the rent counts.

The regulations also take overseas activities out of MTD for someone who was not UK resident two tax years earlier. From 2027-28, someone who was UK resident two years earlier but leaves the UK can have their overseas activities taken out too, once they have given HMRC notice that they are not, or expect not to be, resident.

The one-year exemption for 2026-27

GOV.UK gives an automatic exemption for 2026-27 to anyone whose 2024-25 return included the SA109 residence pages. Being non-resident in the tax year is one of the listed reasons for using SA109, alongside cases such as split-year treatment or being resident in another country as well.

If you did not include SA109 for 2024-25, but reasonably expect to include it in your 2025-26 or 2026-27 return, you need to apply for the exemption instead.

GOV.UK says the exemption lasts until April 2027, and that after it, if your qualifying income is more than £30,000, you need MTD from the 2027-28 tax year onwards. The £20,000 threshold follows from 6 April 2028, tested on 2026-27 income.

The 28 October 2026 Budget said people eligible for qualifying care relief (such as foster carers), non-UK resident entertainers and sportspeople, and people expected to be non-resident will stay exempt from MTD until further notice, with regulations due before April 2027. Not every SA109 filer is in that list, because SA109 also covers split-year treatment and dual residence. Only people expected to be non-resident are named.

Two worked examples

Priya lives in Dubai and is not UK resident. She lets two flats in Manchester for £1,450 and £1,300 a month, which is £17,400 plus £15,600, or £33,000 a year. If her 2025-26 figures look like that, she is over £30,000. Under GOV.UK's current guidance she would need MTD from 6 April 2027, with a first quarterly update due by 7 August 2027. But the 28 October 2026 Budget said people expected to be non-resident will stay exempt until further notice, so she would wait for the regulations.

Tom moved to Spain, is no longer UK resident, and lets his former home for £1,250 a month, which is £15,000 a year. That is under £20,000, so he does not need MTD unless his rent rises above the line in a later year.

The Non-resident Landlord Scheme is a separate thing

Under the Non-resident Landlord Scheme, HMRC treats you as a non-resident landlord if you live abroad for 6 months or more a year, even if you are UK resident for tax purposes. That is a different test from the tax residence MTD uses.

Under the scheme, your letting agent, or your tenant if you have no agent and the rent is over £100 a week, takes basic rate tax off your rent after allowing for expenses they have paid. You can apply on form NRL1i to get your rent in full instead, and HMRC will not approve that if your returns or payments are late. Either way, you still declare your rental income in a Self Assessment tax return unless HMRC tells you not to.

What this means for you

If your UK rent before expenses is over £30,000, you are exempt this year only if the 2026-27 exemption applies to you. The 28 October 2026 Budget said people expected to be non-resident will stay exempt until further notice, but the regulations are not out yet. Until they are, and if you are not covered, plan for 6 April 2027. If your UK rent, plus any self-employment income on your UK return, is £20,000 or less, you are outside MTD for now.

If you must use MTD, a late update can earn a penalty point from 2027-28 if you joined in April 2026, or from 2028-29 if you join in April 2027 (the 28 October 2026 Budget said that group gets no points for 2027-28 updates); 4 points bring a £200 penalty.

Steps to take from abroad

1. Confirm whether you were UK tax resident in each year, since that decides which income counts.
2. Add up your UK rent before expenses for 2025-26, using your share of any joint property.
3. Check whether your 2024-25 return included SA109. If not, and you expect it in 2025-26 or 2026-27, apply for the 2026-27 exemption.
4. Compare your total with £30,000 for 2027-28 and £20,000 for 2028-29. The free MTD check helps with this.
5. If you are over and not covered by the Budget exemption, choose compatible software and sign up before 6 April 2027. Updates are sent online, so you can send them from abroad.

More guides for overseas and UK owners are in the landlord section.