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What is Foreign property income?
Last verified 23 October 2026
Foreign property income is rent and other income from property outside the UK. If you are UK resident you normally pay UK tax on it, and it is reported separately from your UK lettings.
Why it matters to landlords
HMRC treats all your overseas lettings as one foreign property business, kept separate from your UK property business. Profits and losses from overseas property must not be mixed with UK figures. Under Making Tax Digital for Income Tax you keep records for each foreign property and for your share of any jointly let one, and your software combines them into a single quarterly update for the foreign property business.
For UK residents, foreign property income counts towards qualifying income for Making Tax Digital. If you were not UK resident, only UK property and self-employment income on your UK return counts. If the country where the property sits also taxes the rent, you can usually claim Foreign Tax Credit Relief on your tax return, though you may get back less than you paid abroad, depending on the double taxation agreement and the UK rate.
Example
A UK resident earns £25,000 rent from two UK houses and £9,000 from a flat in Spain. Qualifying income is £34,000, and the Spanish flat goes into a separate foreign property quarterly update.
MTD qualifying income explained →