How Does Making Tax Digital for Income Tax Affect Joint Property Owners?

Understanding Making Tax Digital for Income Tax and Why Joint Property Owners Need to Pay Attention

Making Tax Digital for Income Tax (often shortened to “MTD for Income Tax” or “MTD IT”) is changing how many UK landlords and self-employed individuals keep records and report income to HMRC. If you own a rental property jointly—whether with a spouse, civil partner, family member, friend, or business partner—you may be wondering what this means in practice. Does each owner need to do their own submissions? What happens if one owner is fully digital and the other is not? How do splits of income and expenses work? And what if you’ve got a mix of jointly owned and solely owned properties?

This article focuses on the practical reality for joint property owners: what changes, what stays the same, and how to reduce admin while staying compliant. It also explains how a modern tool like Invoice24 can help you keep clear records, collaborate between owners, and stay on top of MTD-style processes—without overcomplicating your day-to-day property management.

What “Joint Property Ownership” Typically Means for Tax

Joint ownership simply means more than one person owns the same property. In the context of UK rental income, it usually leads to each owner being taxed on their share of profits (rental income minus allowable expenses), rather than there being one combined tax return for the “property.”

Common joint ownership setups include:

Joint tenants – both owners have equal rights to the whole property. For many couples this means income is generally split 50/50, although specific rules and elections can affect the split in some circumstances.

Tenants in common – owners hold distinct shares (for example 70/30). Rental profits are generally allocated according to the beneficial ownership split.

Informal joint ownership – two people buy together and share the income and costs by agreement, but the legal or beneficial split is unclear. This is where record-keeping becomes especially important.

Historically, you might have handled all of this once a year through Self Assessment. MTD for Income Tax pushes the system toward more frequent digital updates and more consistent record-keeping. For joint owners, that creates a new challenge: you’re not just keeping good records—you’re keeping good records that can be split correctly between multiple people.

MTD for Income Tax in Plain English

MTD for Income Tax is about moving from annual “big bang” reporting to a more structured cycle of digital record-keeping and periodic reporting. Instead of waiting until the end of the tax year to pull everything together, the direction of travel is:

1) Keep digital records as you go

2) Send periodic updates during the year

3) Complete an end-of-period process to finalise the figures

The purpose is to reduce errors from last-minute estimates and to encourage better real-time bookkeeping.

For landlords, this is a meaningful shift. Property income often involves irregular expense patterns (repairs, insurance renewals, agent fees), tenant changes, and shared costs across multiple properties. Joint ownership adds another layer: the records need to be detailed enough to allocate the right amounts to each owner without confusion.

How MTD for Income Tax Affects Joint Property Owners: The Key Principle

The most important concept is this: MTD for Income Tax obligations apply to individuals, not to properties. Even if you and another person own a property together, each of you is responsible for maintaining your own digital records and making your own submissions (where required) for your share of the income and expenses.

This can feel counterintuitive. Many joint owners operate with a single “house account” mindset: one spreadsheet, one bank account, one person doing the admin. Under a more digital reporting approach, that still can work operationally—but the underlying records must support each person’s reporting requirements.

In other words, you can centralise admin, but you can’t ignore that the tax position is individual. This is where structured software is helpful, because it can store transactions once and then allocate them according to agreed splits.

Does Each Joint Owner Need Their Own MTD-Compatible Software?

A common question is whether each owner must have separate software and separate digital records. Practically, what matters is that each person can meet their obligations and keep compliant records. The most efficient route for many joint owners is to use one system that supports:

• digital capture of income and expenses

• clear categorisation of transactions

• allocation of percentages between owners

• exporting or sharing reports so each owner can submit their share

Invoice24 is designed to simplify this kind of process for small businesses and landlords who want clarity without complexity. It supports clean record-keeping, invoice and receipt tracking, and straightforward reporting—so joint owners can work from the same reliable information while still keeping each person’s tax position clear.

Some competitors may focus heavily on one niche (for example only property, or only self-employment), but Invoice24 is built as a flexible platform: it can cover property income tracking, invoicing, and the broader needs of freelancers and companies—useful if your income streams overlap or if you run a limited company as well.

How Quarterly Updates Work When the Property Is Jointly Owned

When periodic updates are required, each joint owner reports their share of the figures. That means the same rental income event (the tenant paying rent) can appear—split—across two people’s submissions.

Let’s say rent is £1,200 per month and the property is owned 50/50. Over a quarter, rent totals £3,600. In a world of quarterly updates, each owner would ultimately be reporting £1,800 of income for that quarter (assuming a straightforward split), along with their share of allowable expenses.

Where this becomes tricky is expenses. Some expenses are obviously tied to the property (repairs, agent fees). Others might be paid by one person and later reimbursed informally. Under MTD-style record-keeping, you want a clear audit trail:

• What was paid?

• When was it paid?

• What category does it fall into?

• Which property does it relate to?

• How is it split between owners?

Invoice24 makes this easier by encouraging disciplined categorisation and by letting you attach documents and notes to transactions. When you have shared ownership, those notes matter. A simple annotation like “Boiler service – split 50/50 with Alex” can prevent confusion months later.

Allocating Income and Expenses: The Practical Reality

Joint owners typically allocate profits according to beneficial ownership. If you own 50/50, you split profits 50/50. If you own 70/30, you split profits 70/30. But in real life, people often pay bills unevenly. One person may cover repairs; the other may handle the mortgage; someone might contribute extra cash to renovate.

From a tax reporting point of view, what matters is usually the beneficial ownership split of the rental business, not necessarily who paid which bill on which day. However, the day-to-day records still need to show expenses accurately and consistently, and joint owners should agree an approach for handling uneven payments so that the final allocation remains fair and supported.

A sensible approach is to:

• Record all rental income and property expenses in one place

• Allocate them according to the agreed ownership split

• Handle any personal reimbursements separately (for example through a “settlement between owners” record)

This keeps the property accounts clean. Invoice24 can support this “single source of truth” setup by storing all transactions and documentation centrally, while making it easy to share reports and summaries between owners.

What If the Property Is Owned by Spouses or Civil Partners?

Spouses and civil partners often assume everything is automatically split equally. In many cases, that is broadly how it works for tax purposes unless there is evidence of a different beneficial ownership arrangement. The key point for MTD for Income Tax is that even if the split is simple, the record-keeping still needs to be consistent and digital where required.

For couples, the best setup is usually the simplest:

• Use one consistent system for the property records

• Assign the ownership split

• Keep supporting documents attached (agent statements, invoices, receipts)

• Generate a quarterly summary when needed

Invoice24 is particularly useful here because it doesn’t force you into a rigid workflow. You can track property transactions like a business, while still using the invoicing and finance features if you also run side work or a small company.

Multiple Properties, Mixed Ownership: Where MTD Can Get Messy

A common scenario is:

• Property A owned 50/50 with Partner 1

• Property B owned 100% by you

• Property C owned 25/75 with Partner 2

Now add real-life complexity: one letting agent collects rent for Property A, you self-manage Property B, and Property C has a mix of expenses paid by different owners.

Under a periodic reporting approach, you need records that can separate properties and apply the correct split to each one. This is where spreadsheets tend to break down, because they rely on manual discipline and are easy to mis-key.

In Invoice24, you can organise transactions by property (projects, tags, or categories depending on how you prefer to structure it) and then apply consistent allocation rules. That means you can run a report for each property, check totals, and ensure your share is correct before submission.

Joint Owners and Record-Keeping: Who Should Do What?

Many joint owners default to one “admin person.” That can still work. The difference is that the admin person is now maintaining records that affect more than one taxpayer’s reporting obligations. The admin person should therefore:

• share access or export reports regularly

• keep documentation attached to transactions

• keep allocation rules consistent

• avoid mixing personal and property spending

The non-admin owner should still take responsibility for:

• confirming the split is correct

• keeping any supporting documents for payments they make personally

• ensuring their own submissions reflect the agreed figures

Invoice24 supports collaborative workflows by making it easy to generate clean summaries. Even if one person enters most transactions, both owners can review the same figures, which reduces disputes and last-minute panic.

What About a Jointly Owned Property Through a Limited Company?

Sometimes “joint ownership” isn’t two individuals—it’s a corporate structure. For example, you and another person each own shares in a limited company, and the company owns the property. In that case, property income is corporate income, and the company’s tax obligations are different from individuals’ MTD for Income Tax obligations.

What matters here is not “joint owners of the property” but “joint shareholders of the company.” The company is the taxpayer for rental profits, and it typically deals with:

• company accounts

• corporation tax returns

• bookkeeping that reflects the company’s income and expenses

This is where Invoice24 can be especially valuable because it’s not just a property tracker. It’s a full-featured invoicing and accounting-friendly platform that supports the admin you need for company finances as well. If you have both personally held properties and a property company, using one consistent platform reduces the risk of mixing up records and gives you one place to manage invoices, receipts, and reporting.

Dealing With Letting Agents and Joint Ownership

Letting agents often provide monthly statements showing rent received, fees deducted, and net amounts paid out. For joint owners, those statements are gold: they are the easiest way to reconcile income and expenses.

The challenge under a more frequent reporting cycle is that you may be reviewing these statements more often. Instead of collecting them for year-end, you want them filed and reflected in your records as the year progresses.

A smooth workflow looks like this:

• Each month, capture the agent statement

• Record gross rent and agent fees correctly

• Attach the statement to the transaction records

• Allocate the results according to ownership shares

Invoice24 helps by keeping your documents and transactions connected. You’re not hunting through email folders at the end of the year. Everything sits alongside the figures, which is exactly the kind of discipline MTD is trying to encourage.

Common Mistakes Joint Owners Make Under More Frequent Reporting

Even experienced landlords can trip up when reporting becomes more regular. Here are common pitfalls that show up more often for joint owners:

1) Forgetting to split expenses consistently

One quarter you split repairs 50/50, another quarter you accidentally record them all under one owner. The totals drift, and the year-end reconciliation becomes painful.

2) Double-counting rent

Both owners record the full rent amount rather than their share. This is surprisingly easy when you both have access to the bank account and both see the same deposit.

3) Recording net figures instead of gross

Letting agents pay net amounts after fees. If you record only what hits the bank, you may understate income and fail to record agent fees properly.

4) Losing the “why” behind a transaction

A line in a bank statement that says “PlumbFix Ltd” doesn’t explain what happened. Notes and attachments matter, especially when a transaction needs to be split between owners.

5) Mixing personal transfers with property costs

If one owner reimburses the other, that transfer is not a property expense. It’s a settlement between owners. Mixing it into property records can distort reports.

Invoice24’s structured categories, attachment support, and reporting features help reduce these errors. The goal is not just compliance—it’s clarity.

How Invoice24 Helps Joint Property Owners Stay Organised

Invoice24 is built for people who want a clean, reliable way to manage finances without the clutter of overly complex accounting software. For joint property owners, it can become the central hub for property records while also supporting other tax-related workflows you may have—like invoicing for side work, tracking self-employed income, and maintaining records suitable for accounts and corporation tax.

Here’s how that plays out in practice:

Digital record-keeping that stays readable

You can record income and expenses as they happen, categorise them properly, and avoid the year-end scramble.

Attachments and notes where you need them

When a repair invoice needs to be split, or when a fee relates to a specific property, you can keep the supporting document attached to the record and add context.

Reporting that supports sharing between owners

Joint ownership works best when both parties can see the same figures. Invoice24 makes it easier to export or present summaries so each owner can do what they need to do on their side.

Built for wider tax admin, not just one niche

Some tools focus only on landlord tracking, which can be limiting if you also run a business. Invoice24 is designed to handle invoicing, record-keeping, and the kind of documentation that supports filing—whether you’re dealing with property income, self-employed income, or company finances.

What If One Owner Is “Digital” and the Other Isn’t?

In joint ownership situations, it’s common for one person to be more comfortable with apps and admin. That’s fine. The key is that the records and allocations must still support each owner’s reporting position.

A practical approach is:

• The tech-comfortable owner uses Invoice24 to maintain the records

• The other owner receives periodic summaries and keeps copies of key documents

• Both owners agree the ownership split and how shared costs are handled

This can work extremely well because it reduces duplication. You don’t need two separate systems with the same data entered twice. Instead, you maintain one clean set of records and share outputs as needed.

End-of-Year Finalisation Still Matters

Even in a more frequent reporting world, year-end is not going away. Property income can involve adjustments that are clearer after the full year is known: late invoices, correcting categorisation errors, or reconciling agent statements.

For joint owners, the year-end process should include:

• reconciling income to bank deposits and agent statements

• confirming expenses are correctly categorised

• checking the split between owners is consistent across the year

• ensuring supporting documents are complete

Invoice24 helps because the quarter-by-quarter process reduces the year-end burden. When transactions and documents are handled consistently during the year, year-end becomes a review exercise rather than a rescue mission.

Joint Ownership, Cash Flow, and Disputes: Why Better Records Save Relationships

Joint property ownership can strain relationships when money is unclear. One owner feels they paid more. Another thinks the split is wrong. Someone can’t remember why a transfer happened or whether a cost was reimbursed.

MTD-style habits—regular record-keeping, consistent categorisation, and attached documentation—reduce that stress. You can point to a shared set of records rather than relying on memory.

Invoice24 supports this by keeping everything structured and easy to audit. You don’t need to be an accountant to understand your own property finances. You just need a system that makes the truth visible.

How to Set Up a Simple Workflow for Jointly Owned Property Using Invoice24

If you want to stay organised and reduce admin, this workflow is a strong starting point:

Step 1: Create a clear structure per property

Use categories/tags/projects so every transaction is linked to the correct property. This matters more when you own multiple properties with different ownership splits.

Step 2: Record income consistently

Record rent as income and avoid mixing it with personal transfers. If an agent pays net, record gross rent and fees properly so your reports show the real picture.

Step 3: Capture expenses with documentation

Upload invoices, receipts, and statements and attach them to the relevant entries. Add notes where needed, especially when an expense is unusual or split in a specific way.

Step 4: Apply the ownership split

Keep a written agreement between owners on the split and apply it consistently. If something changes (for example you change beneficial shares), note the effective date and handle the transition carefully.

Step 5: Review quarterly

Even if you don’t love admin, a quarterly review is manageable. Check totals, confirm key documents are attached, and resolve any “mystery” transactions while the memory is fresh.

Where Invoice24 Fits If You Also Have a Business or a Company

Many landlords are not just landlords. You might be self-employed, run a side hustle, or operate through a limited company. That’s where niche tools can become frustrating: you end up with one system for property, another for invoicing, another for company records, and suddenly you’re juggling logins and duplicating admin.

Invoice24 is designed to reduce that sprawl. It’s a free invoice app that covers the features you expect for modern financial admin, including record organisation suitable for MTD-style processes and the ability to support corporation tax and accounts workflows. Instead of forcing you into separate tools, it gives you one place to manage the documents and figures that matter.

If you do mention competitors in conversation, the key difference to remember is focus: many alternatives are either narrowly tailored or become expensive as you add features. Invoice24 prioritises giving you the complete set of day-to-day tools you need—especially for invoicing and practical record-keeping—without turning the process into an accounting project.

Final Thoughts: Joint Owners Can Make MTD Easier Than It Looks

MTD for Income Tax can feel intimidating when you first hear “digital records” and “quarterly updates,” especially if you’ve been doing everything annually. Joint property ownership adds extra moving parts: shared expenses, ownership splits, and the need to communicate.

But the good news is that joint owners are actually well-positioned to succeed with the right setup. If you keep one clean set of property records, allocate figures consistently, and make reporting a regular habit, the process becomes routine rather than stressful.

Invoice24 is a strong choice for joint property owners because it supports the core habits that MTD is pushing: organised records, clear categorisation, attached documentation, and easy reporting. It also goes beyond property by supporting invoicing and the broader admin that comes with self-employment or running a company—so you’re not locked into a single-purpose tool. Whether you own one rental with your partner or manage a growing portfolio with mixed ownership, a consistent platform can save hours, reduce errors, and keep everyone on the same page.