Foreign Property Income and Making Tax Digital: A Landlord's Checklist for Keeping Records

If you own a flat in Leeds and a holiday apartment in Spain, you already know the paperwork rarely lines up. The rent from the UK arrives in sterling, the Spanish rent arrives in euros, and the agent's statements come in a third format. Making Tax Digital for Income Tax (ITSA) asks you to keep those figures in a digital record, so it helps to sort out the foundations now rather than in the week before a submission is due.

This checklist is about record keeping for foreign property specifically. It does not tell you what you owe or which costs you can claim. Those answers depend on your circumstances, and your accountant is the right person to give them.

Who this is for

This is for landlords who have a holiday let or long-term rental abroad as well as property in the UK. It is also for landlords who have only foreign property and need to know how it fits into ITSA. Many owners in this position run the business alone or with a spouse, with an agent or two overseas, and with a bookkeeper or accountant who only sees the numbers once a year.

If you are already filing a self assessment return, you will recognise most of the income and expense categories. What changes under MTD is the frequency of digital updates and the need for records that can be pulled into software rather than assembled from a shoebox at the end of the year.

Why UK and foreign property are reported separately

For ITSA purposes, UK property and foreign property are treated as separate sources of income. That means you should not mix them in one running total in your records. Keep a separate property income source for each, so that the rent, agent fees and running costs for the Spanish apartment do not get blended with the UK flat.

This matters because the rules for each can differ, and because a single mixed ledger makes it harder to check figures back against bank statements and agent reports. Set up the sources first, then add transactions to the right one as they happen. Your accountant can confirm how the sources should be structured for your own return.

Keeping rent, agent fees and running costs in one place

The practical problem is usually not the tax rules but the paperwork. Rent comes in from several places, agents deduct fees before paying out, and repairs are paid from different accounts. Here is a simple routine that works for most landlords:

• Record the rent as it is received. Note the date, the property, the amount in the currency it arrived in, and the bank account it landed in.
• Record agent fees separately. If the agent pays you a net figure, record the gross rent and the deduction as two lines, so you can see both.
• Note the currency for every foreign transaction. Write down the amount in the original currency. Ask your accountant which exchange rate they want you to use, and record the rate you applied so the figure can be checked later.
• Keep a note of running costs. Insurance, repairs, utilities, cleaning and service charges all go in the relevant property source, with the date and a short description.
• Attach the evidence. Keep the agent's statement, the invoice or the receipt, and the bank statement line that matches each item.

Do this weekly or monthly rather than once a year. Catching a missing receipt in March is far easier than reconstructing it in January.

Using figures already in BizHub365 for ITSA submissions

BizHub365 lets you keep UK and foreign property records in the same system as your invoices, bookings and payments, so you are not copying figures between a spreadsheet, a bank app and a tax tool. For ITSA, the software uses the figures already recorded in the system for UK Property and Foreign Property, so you do not need to re-key the same numbers.

What this means in practice is that the information you enter as you go is what gets used when it is time to report. You still need to check it. Reconcile the totals against your bank and agent statements each period, and look through any entries that look wrong before anything is sent to HMRC. Think of the system as the place your records live, not as a replacement for your own review.

If you also run a business that takes bookings or sends invoices, you can keep those records alongside your property figures. Many landlords who manage holiday lets find this helpful, because the booking diary, the guest details and the payments from the same stay sit together.

Working with your accountant on what counts as allowable

Some costs are obviously business costs, and some are obviously not. Plenty sit in between: the cost of furnishing a holiday let, travel to check on a property abroad, or a repair that might be treated as improvement rather than maintenance. These are judgement calls, and they belong with your accountant or tax adviser.

BizHub365 is software for keeping records. It does not decide what is allowable, and it does not calculate your tax. What it can do is give your accountant a clear, consistent record to work from. Invite them into the system if they support it, agree on categories with them early, and ask them to tell you which items they want kept separately. That working relationship will save both of you time at every reporting point.

What HMRC MTD Recognised software means

HMRC publishes a list of software that is recognised for Making Tax Digital. BizHub365 is HMRC MTD Recognised, with product ID AN9C2Y. That means it is on HMRC's list of software that can be used for MTD. It does not mean HMRC has approved the software, and it does not mean the software will decide what your return should say. You still need to check your figures and make sure the return reflects your own circumstances.

If you are unsure whether your current tools are recognised, check the product ID against HMRC's published list, and speak to your accountant about any switch.

Getting started before the next reporting period

If you have one UK property and one abroad, or several of each, the simplest first step is to set up each property as its own income source now. Enter the opening details, the currency for each property, and the agent or management arrangements. Then add the last few months of rent and costs, so you have a history to check against.

You can start with a free trial and see how your own properties look in the system before you commit. Start your free 14-day trial and set up your UK and foreign properties before your next reporting period. The trial takes a card, and if you cancel before it ends you will not be charged. After the trial, BizHub365 One is £29 a month, with unlimited team members, so your accountant or a family member can work in the same records without extra per-user fees.

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