Working out your qualifying income

Your qualifying income is the total income that you get in a tax year from self-employment and property.

HMRC will assess your gross income (also called your turnover) before you deduct expenses.

For example, your gross income (income before you deduct expenses) could be:

• £25,000 from rental income
• £27,000 from self-employment income

In this example, your total qualifying income would be £52,000.

How HMRC will assess your qualifying income

To assess your qualifying income for a tax year, wewe’ll will look at the Self Assessment tax return that you hadsubmitted toin submit the yearprevious before.tax year.

For example, to assess your qualifying income for the tax year 2026 to 2027, wewe’ll will look at the tax return that you submittedneed to submit by 31 January 2026. This tax return is for the tax year 2024 to 2025.

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What’s included in your qualifying income

If you get income from a jointly owned property

Your share of the property income will count towards your qualifying income. For example, you could:you:

• jointly own a property with your sibling which generates £50,000 in income
• both receive an equal share
• do not have any income from self-employment

In this example, your qualifying income would be £25,000.

If you jointly own a property and only receive notice of your share of the income after expenses have been deducted, then wewe’ll will assess that figure for your qualifying income.

If you use the cash basis and are VAT registered

You can choose to include or exclude VAT when you declare your business income. If you include it, then it will count towards your qualifying income.

If you’re a carerbeneficiary of a bare trust

Any property or trading income that isyou’re eligibleentitled forto will count towards your qualifying careincome.

If reliefyou’re a beneficiary of an interest in possession trust

TheAny qualifyingproperty careor receiptstrading income that is paid directly to you receiveand willbypasses notthe trustees will count towards your qualifying income.

If youthe gettransactions incomein fromUK aland partnershiprules apply

IncomeIf fromyour income is treated as profits of a partnershiptrade doesunder notthe transactions in UK land rules, it will count towards your qualifying income,income unlesswhere youit receiveis disguiseda investmentcontinuing managementincome feessource orover incomemore basedthan carriedone interest.tax year.

If you receive disguised investment management fees or income based carried interest

These forms of remuneration are treated as the profits of a deemed trade and will form part of your qualifying income.

What’s not included in your qualifying income

If you areget aincome beneficiaryfrom of a bare trustpartnership

AnyIncome propertyfrom ora tradingpartnership incomedoes thatnot count towards your qualifying income, unless you arereceive entitleddisguised toinvestment willmanagement countfees towardsor yourincome qualifyingbased income.carried interest.

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You interestmay inhave possessiontransition trust

Anyprofits propertyfrom orprevious tradingtax incomeyears that iswill paidbe directlyassessed in the tax year 2024 to you2025 and bypasses the trusteesnext 4 tax years. These profits will not count towards your qualifying income.

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How youyour aretax residentresidence andaffects domiciledyour inqualifying theincome

If you’re UK tax resident

Your qualifying income fromwill foreigninclude property or foreign your:

• self-employment willincome
• UK countand towardsforeign yourproperty qualifying income. 
  income

For example, you could: could:

• be a sole trader in the UK UK
• rent out a property in another country France

IfIn youthis areexample, resident and domiciled in the UK, both income sources will contribute to your qualifying income.

If youyou’re arenot deemedUK domiciledtax in the UKresident

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• UK foreignproperty income
• self-employment willincome countthat towards your qualifying income, if you arehave treateddeclared asin your UK domiciledSelf forAssessment that tax year.
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Foreign youproperty areincome residentand orincome domiciledthat outsideyou ofhave thenot UK

Onlydeclared incomeon fromyour UK self-employmentSelf andAssessment UKtax propertyreturn will count towards your qualifying income. You do not needcontribute to use Making Tax Digital for Income Tax for your foreignqualifying income.

For example, you could:

• be domiciledtax resident in FranceSpain
• rent out a property in Francethe UK
• runbe a businesssole trader in the UKSpain

OnlyIn this example, only your UK self-employmentproperty income would contribute to your qualifying income.

We will ask you to confirm your domicile status when you sign up for Making Tax Digital for Income Tax.

After you work out your qualifying income

Once you’ve worked out your qualifying income, you can find out if and when you need to use Making Tax Digital for Income Tax.