Updating post from Reddit.
I am currently an accidental landlord. The mortgage and deed is under my name. The bank has given me a consent to let up until 2026 and then the residential mortgage will be converted into a buy to let mortgage.
Currently, Is it possible to transfer the ownership to someone (say my parents who are not working) but have my name on the mortgage ? The reason for asking is because I currently am a higher rate tax payer so would transferring the deed to someone not working wpuld mean less tax would have to be paid comparatively speaking ?
Does transferring a dead come with stamp duty charges?
Not really as the mortgage company in effect own the property and would block this.
Youd possibly look at doing a deed of trust instead, which would give your parents the beneficial interest of the rental payments. However, its not as straight forward as it sounds and there are oitfalls further down the line regards ‘beneficial interest’ i.e. they are entitled to the ‘beneficial interest’ of the entire value of the propety if you died, and also potential tax implications. Its also tricky to reverse as youre into tax avoidance areas. Heres a little insight into the tax situation.
As to your mortgage lenders position, if transferring ownership its like any ordinary sale, so you must clear the mortgage or your parents must pass eligibility checks with the lender to take the mortgage on. So in short, no, your parents cant ‘own’ the house whilst you ‘own’ the mortgage. Again tax implications could apply, CGT etc.
https://www.taxinsider.co.uk/transferring-rental-income-be-careful
The mortgage is effectively a loan to you secured against the property you own. If you think about what you are suggesting you would have a loan from a bank secured against a property you don't own. So the bank would have no right to take back the property from your parents if you stopped paying the mortgage as they don't have a contract with the bank. So no your mortgage company aren't going to allow this.
No you can’t, why would the lender allow you to transfer away ownership of the property while you still owe them a bunch of money? It would effectively be turning the mortgage into an unsecured loan.
There is a way to give the benefit of the property to someone else without transferring ownership.
If the goal is to put money into your parents’ pockets you could pay them to manage the property. They would have to do the work and do properly; invoice and declare to hmrc. It’s a cost to you reducing your profits and its income for them which up to 12 k would be tax free if they aren’t earning money elsewhere.
Agents typically charge 10-12% for find and manage service.