Assignment of beneficial interest

Dear Sir/ Madam I purchased a small HMO rental property from my parents in 2023. I paid approximately 76% of the property's value in cash with the remaining 24% to be paid via an interest free personal loan from my parents over 5 years or sooner. The personal loan has been detailed as a charge in the deeds with the Land Registry so in the event I sell the property my parents can claim their money back. My conveyancing solicitor informs me I can set up an assignment of beneficial interest to make my parents the sole recipients of the property's gross rental income, allowing me to repay the loan faster. My parents accountant is concerned such an arrangement would be perceived as tax avoidance by HMRC. Please can you confirm whether an assignment of beneficial interest constitutes a compliant and lawful way of repaying the loan under these circumstances. Thank you.

Hi,
 

Thank you for your question. The charge on the deeds for the loan provided by your parents does not make them co-owners of the property with yourself.  The splitting of benefical interest can only be applied if the property is jointly owned and as you are the sole owner of the property any and all income from said property would have to be declared by yourself. Thank you .