Thanks for your question - I am Sam and I am one of the Uk tax experts here on Just Answer.
First its unlikely that hr will be able to gift this property whilst it still has a loan/mortgage on it. So he may wish to look into this a little furtehr to see is this is possible.
But if he can gift the property then the rental income would no longer legally be his and would be that of the persons whose name the property has been placed into - and they would be liable to tax on this.
The 7 year rule has nothing to do with capital gains - this relates to Inheritance tax - which states should a gift be made and within 7 years the giftor passes away (the person making the gift) then it will be treated as still being part of their estate for Inheritance tax purposes.
The gift with reservation only applies when a main home is gifted and the original owner remains living there - so this would not apply in this case. Nor would pre owned asset tax which also relates to the same thing.
AND there will be a capital gain consideration as your partner is gifting a property that is no longer his main residence.
So to recap
Its unlikley he can legally gift this property as it has a mortgage still on it
If it can be gifted he cannot continue to receive the rental income as the property would no longer legally be his
Capital gains will apply on any profits made on this property since its purchase and the date its gifted (although releif is due for the time it was the main residence and the last 18 months of ownership and possibly private lettings relief -)
Inheritance tax could be will be a consideration should your partner die within 7 years of gifting this property (but of course this is only f his total estate and this property are in excess of £325,000)