One foreign property business, separate from UK property
For MTD for Income Tax, all foreign properties are treated as one foreign property business. All UK properties are treated as one UK property business. The two are separate.
If you have more than one income source, you sign up for each one. The foreign property business is an income source in its own right, so it is not merged with the UK property business.
Qualifying income is tested before expenses, using turnover. Add self-employment income and property income together before testing the threshold.
- All foreign properties: one foreign property business
- All UK properties: one UK property business
- Employment income, a partnership share as an individual partner, dividends and pensions do not count towards the threshold
What must be recorded
A digital record is a record of income or an expense created and stored in compatible software. Business records for income and expenses must be kept for Self Assessment.
The categories used in quarterly updates are the same income and expense categories as Self Assessment. HMRC receives the category totals, not the individual transactions.
Keep digital records for at least 5 years after the 31 January submission deadline for the tax year. Once a record has been sent to HMRC in a quarterly update, it must not be moved by hand, either within the software or between products.
- Income recorded in the foreign property business
- Expenses recorded in the foreign property business
- The same income and expense categories as Self Assessment
- Digital records kept for at least 5 years after the 31 January submission deadline
Quarterly updates for the foreign property business
Four updates a year are built from digital records. Each is a set of totals by income and expense category, cumulative from 6 April, and is a summary, not a tax return.
You must still send an update for a period with no income and no expenses.
The deadlines are the same whatever the update period type. Standard periods run 6 April to 5 April. Calendar periods run 1 April to 31 March.
| Standard period ends | Deadline |
|---|---|
| 5 July | 7 August |
| 5 October | 7 November |
| 5 January | 7 February |
| 5 April | 7 May |
You can send from the end of the period up to the deadline, or up to 10 days before the period ends if you expect no further transactions. The accounting period cannot be changed after the first quarterly update has been sent.
You can send updates more often than quarterly, but each must cover the full update period.
Currency conversion and the foreign property record
This page does not give a currency conversion rate or method. The reporting structure is clear: all foreign properties are treated as one foreign property business, separate from the UK property business.
The totals are sent in the same income and expense categories as Self Assessment. HMRC receives the category totals, not the individual transactions.
Records must be created and stored in compatible software and kept for at least 5 years after the 31 January submission deadline.
Cash basis for the foreign property business
Cash basis is the default method of accounting from 2024-25. You opt out to use traditional accounting.
Under cash basis, income and expenses are recorded when money is received or a bill is paid.
Sign-up and the tax return
You must be registered for Self Assessment and have submitted a tax return in the last 2 years to sign up. You sign up each income source if you have more than one.
Sign-up does not ask about other income sources or gains. Those are added in compatible software before the tax return is submitted.
The quarterly updates are summaries, not a tax return. The tax return is submitted after the tax year, and the tax is paid by 31 January.