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Setting Up & Submitting Foreign Property Business Quarterly Returns (MTD ITSA)

Shannon Brady
  • Updated

Who this article is for:
Landlords who have overseas rental properties that are taxable in the UK and need to submit quarterly updates under Making Tax Digital for Income Tax (MTD for ITSA) using BrightBooks.

From the 2026–27 tax year, your Foreign Property Quarterly Updates in BrightBooks are organised per property, not per country. This makes it easier to review income and expenses for each individual property before you submit.

 

 

Before you start: set up each Foreign Property

Each foreign property you report to HMRC needs to be set up separately in BrightBooks.

 

You or your accountant should:

  1. Create a Division for each foreign property
    For every overseas property, set up a separate Division in BrightBooks. For each Division, make sure:

    • Property name – for example, “Barcelona Apartment” or “Lisbon Studio”.

    • Country – select the correct country for the property.

    • HMRC property ID – the HMRC identifier for that property (your accountant will usually help with this).

    • Foreign Tax Credit Relief (FTCR) – whether you are claiming foreign tax credit relief for that property.

     

  2. Record income and expenses per property

    • Record rental income and expenses in BrightBooks against the correct property/Division.

    • Amounts should be entered in GBP, using your agreed exchange rates.

 

 

Before submitting a foreign property MTD ITSA return to HMRC, you must log in to the HMRC online service and grant BrightBooks permission to view and update your self‑assessment details.

To do this:

  1. Go to Settings > MTD > MTD ITSA Setup in BrightBooks.

  2. The first time you access this, you’ll be redirected to the HMRC website and prompted to “Allow your software to connect with HMRC” – this grants BrightBooks permission to view and amend your self‑assessment information.

  3. Click Continue.

  4. HMRC will remind you which credentials you need (your HMRC user ID and password).

  5. Click Sign in to the HMRC online service.

  6. Enter your HMRC user ID and password, then click Sign in.

  7. You’ll be asked to grant BrightBooks permission to access and update your self‑assessment details. Click Give permission.

Note: This permission normally lasts for up to 18 months, after which it must be renewed. You can revoke this permission at any time via your HMRC online account. gov.uk +1

  1. You’ll be redirected back to BrightBooks MTD ITSA Setup, where you must enter the business’s National Insurance Number (NINO).

  2. Once you enter a valid NINO, BrightBooks will automatically retrieve from HMRC:

    • The MTD Tax ID

    • The Accounting Method (Cash or Accruals)

    • The Tax Quarter Type (Standard or Calendar)

    • The Tax Year (for example, 2025–26)

These details are maintained by HMRC; changes must be made via HMRC’s online services.

  1. Click Save to store your settings and close the setup screen.

You are now ready to view and submit your foreign property quarterly MTD ITSA returns in BrightBooks.

 

Quarterly Returns – Foreign Property

Foreign property income is treated as a separate property business for MTD purposes. You must submit a separate quarterly update for foreign property, in addition to any self‑employment or UK property updates you may have.

To access foreign property quarterly returns

  1. Go to General Ledger > MTD ITSA.

  2. The first time you access this area, BrightBooks will download the list of open and past obligations from HMRC (including foreign property quarters).

  3. In the list, select the Foreign Property income source.

You will see for each period:

  • The quarterly return start and end dates (based on the Tax Quarter Type – Standard or Calendar).

  • The return due date (normally the 7th of the month following quarter end).

  • The Date Received by HMRC, if applicable.

  • The Return Status, which can be:

    • Open – neither generated nor submitted

    • Generated – created but not yet submitted

    • Submitted – generated and sent to HMRC

    • Fulfilled – generated, submitted and accepted by HMRC

  • The user who created the return, with date and time.

 

Submitting a Foreign Property Quarterly Return

To submit a quarterly foreign property return:

  1. In Nominal Ledger > MTD ITSA, locate the foreign property entry for the required quarter.

  2. In the inline menu for that period, click Generate.

  3. Confirm you want to generate the return by clicking OK.

A screen will appear showing the period related to the generated amounts, with headings required by HMRC, for example:

  • Period Income – total foreign property income for the quarter

  • Period Expenses – total allowable expenses for foreign property

  • Period Disallowed Expenses – any disallowable amounts, if applicable

BrightBooks supports per‑property breakdowns; you wil see separate sections per property (e.g. “Barcelona Apartment – Spain”), each with its own income and expenses totals. Use the on‑screen layout to review each property as needed.

  1. Review the figures:

    • If anything is incorrect, click Close, correct your underlying entries (or per‑property Division data), and generate again.

    • If you are happy with the figures, click Save.

After saving, the Return Status will change to Generated, and below option will appear in the inline menu:

  • Submit MTD ITSA Generated

 

Submit the Foreign Property Return to HMRC

  1. Click Submit in the inline menu for the Generated foreign property return.

  2. BrightBooks will show the saved summary. We recommend you re‑generate the report before submitting to include any last‑minute changes.

  3. Review the figures one final time.

  4. Tick the declaration to confirm the information is true and complete.

  5. Click Submit, then confirm when prompted by clicking Proceed.

  6. BrightBooks will submit the foreign property quarterly update to HMRC and show a confirmation message.

  7. The Return Status will update to Submitted. Once HMRC confirms receipt, it will move to Fulfilled.

 

 

Example scenarios

Example 1: Multiple foreign properties

You have three overseas properties for TY 2026–27:

  • “Barcelona Apartment” (Spain)

  • “Lisbon Studio” (Portugal)

  • “Nice Apartment” (France)

When you generate the quarterly return, you will see three separate sections in the popup – one for each property, with their own income, expenses, foreign tax and FTCR details.

 

Example 2: Property with missing FTCR setting

  • You generate your foreign property quarterly return.

  • One property has no FTCR setting in its Division setup.

  • When you try to submit, BrightBooks blocks submission and shows which property is missing FTCR, telling you to complete its setup first.

You update the Division, regenerate, and then submit successfully.

 

Example 3: Two properties in the same country

You own:

  • “Barcelona Apartment” (Spain)

  • “Madrid Villa” (Spain)

You will see two sections in the Generate and Submit pop-ups:

 

  • One for “Barcelona Apartment – Spain”

  • One for “Madrid Villa – Spain”

Each has its own figures and FTCR setting. They are not merged into a single “Spain” total, so you can review them separately.

 

If you’re unsure about any of the above, contact your accountant or BrightBooks support.