Parent -> Child Property Transfer

foxy-stoat

Lover_of_Lycra said:

The 180k mortgage will need to be cleared before any transfer of ownership can be done.  Who is going to pay that, you or your parents?  It matters for SDLT.

Your parents will have a CGT bill based on a gain of 250k.  Look on the forum as there are several examples of the calculations works already.

I've absolutely no idea what your 3rd point means either OP.  However, I think it's safe to say that you are not a beneficial owner of the property regardless of what money you think you have put in otherwise you would have been due a portion of the rental income.

As well as a portion of the rental income, you would of needed to submit tax returns since 2009 too, whether you made a profit or not.
Phew, I thought it was just me who wasn't understanding as well.

oldbikebloke

gza101 said

1) Whether the CGT is paid by my parents or myself, the impact is the same to the net value of the asset - that isn't the point.
2) They will not be using or requiring state care, or generating a negative tax bill.
3) Whether I was functionally liable or not (I was) for the mortgage, no-one taking interest rate and property value risk for a geared asset is receiving anything "for nothing". That's how borrowing money and buying things works, yeah?

1. Yes the "profit" on the asset will be reduced by CGT. That is not the point. 
The point is your parents are the beneficial owners of the property because they are the ones who received the rental income from it. CGT is based on beneficial ownership, not legal ownership, or whose name a mortgage is in.
So, as asked by others, the real question is do your parents have enough cash to pay the tax without actually selling the property. If their intention is to gift you the ownership, that implies no money will come from you that they can use to pay the CGT.

How is the interest only mortgage going to be paid off - do they have 180k in cash to repay it themselves? Legal ownership cannot change until the mortgage is paid off, that is the whole point of the mortgage, the lender has a charge against the property that prevents it being sold (or gifted)  until the lender says it can be . 
The chances of you getting a UK buy to let mortgage as a non UK resident/overseas student with no income in your own name (except possible rental income) are practically non existent.  So how do you think you will get money to them if they can't clear their mortgage?

2. Deprivation of assets has no time limit.

3. Legally the mortgage liability is with the parents. Yes, morally speaking you paid towards it (in full or in part is unclear) but that is irrelevant since all moneys paid by you are the taxable income of your parents upon which they had to pay tax before any residual money could be spent by them on their mortgage. 
You are correct that anyone using gearing to buy an asset is exposed to the possibility that the income will not cover the gearing costs. That is not the point, the point is it is your patents who took the risk, not you.