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The Chagos Islands is at the centre of an ongoing dispute over ownership between the UK and Mauritius. The validity of each claim is covered in another question

However, currently the only use The Chagos Islands is put to is a US military base.

Since 1971, only the atoll of Diego Garcia is inhabited, and only by military and civilian contracted personnel. Since being expelled, Chagossian natives have been prevented from returning to the islands.

While the article refers to it as a joint US-UK military establishment, as far as I can see there is no significant UK component to the occupants.

Given the diplomatic issues involved, why does the UK continue to own the problem instead of handing it off to the US, to whom it already appears to have ceded control for all practical purposes?

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    According to Wikipedia, the islands' population is roughly 10% British government officials, and 90% US military personnel. Whether that 10% constitutes a "significant component" is a matter of opinion, but there are Brits on the island even if the US contingent vastly outnumbers them.
    – F1Krazy
    Commented Nov 26, 2019 at 14:57
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    @F1Krazy: In fact, considering that the U.S. has the largest (or 2nd largest, depending on your measure) bar none, it usually follows that they have a bulk of the personnel at any joint military base they are a part of. I suspect that joint bases in Germany and Japan are predominantly U.S. (I know one in Japan that is majority American... the commissary tends to stock American brands while the nearby japanese grocery store stocks Japanese brands).
    – hszmv
    Commented Nov 26, 2019 at 15:46
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    "Given the diplomatic issues involved" Do you think that the UK is very worried about the measures Mauritius can take against it? I know that the empire is long gone, but it has not fallen so low as that...
    – SJuan76
    Commented Nov 26, 2019 at 16:50
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    @SJuan76 - Especially since the most likely target of any actions by Mauritius would be the Chagos Islands themselves, and those are quite well defended by the aforementioned heavy US military presence there.
    – GeoffAtkins
    Commented Nov 26, 2019 at 18:56

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The United Kingdom's position is that it is abiding by the 1965 Lancaster House Undertakings which resulted from talks between representatives from the UK and Mauritius, as well as the 1966 agreement with the US. Ceding the territory to the US, or to any state, for that matter, would appear to constitute a breach of these agreements.

One of the Lancaster House Undertakings - which are laid out in paragraph 74 of the report from a 2015 UN convention on the law of the sea tribunal - was to return the Chagos Islands to Mauritius when the territory is no longer required for defence purposes. The UK's position on these undertakings was laid out by then Minister for Europe and the Americas, Sir Alan Duncan, in July 2019:

Mauritius entered that agreement in return for certain benefits, including a sum of £3 million and a UK commitment to cede the territory when it is no longer needed for defence purposes. That UK commitment still stands. Mauritius affirmed the 1965 agreement numerous times following independence, and the agreement was held to be legally binding by a UN convention on the law of the sea tribunal in 2015. No international court or tribunal has ever found our sovereignty to be in doubt.

Ceding the territory to the United States would, presumably, render the UK unable to abide by this commitment.

Furthermore, the UK also agreed on a treaty in 1966 with the US which states:

(1) The Territory shall remain under United Kingdom sovereignty.

...

(11) The United States Government and the United Kingdom Government contemplate that the islands shall remain available to meet the possible defense needs of the two Governments for an indefinitely long period. Accordingly, after an initial period of 50 years this Agreement shall continue in force for a further period of twenty years unless, not more than two years before the end of the initial period, either Government shall have given notice of termination to the other, in which case this Agreement shall terminate two years from the date of such notice.

As no such notice of termination was given, according to Sir Alan, this represents a "binding treaty obligation to maintain UK sovereignty over the whole territory until at least 2036."

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