Selling off part of property to wholly owned sole trader company

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    Selling off part of property to wholly owned sole trader company


    I'm after a bit of general advice before I start to spend any money.

    I own a house which has a granny flat/annexe at the bottom of my garden.

    I am looking at buying a bit of land from my neighbour to build a separate drive to this annexe with a view to separating it off to rent out/sell. I don't forsee any planning issues with this and my mortgage company "in principal" have no issue with it. I would look to register the annexe fully as a separate property.

    My only issue is that the annexe is quite close to my house and giving up control (ie: selling it) would make my a little uncomfortable. I would prefer to keep control of the property and rent it out however would also like to realise a lump sum from it! I have been toying with the idea of separating the property and then selling it to a sole trader company which is wholly owned by me. The sole trader company would raise a buy to let mortgage on the property and I would have the best of both worlds - lump sum raised and I also keep a control on who can occupy the property.

    My question is whether the above is viable and worth pursuing? I understand that accounts would have to be completed for the sole trader but wondered in the eyes of the law whether this would be correct?

    Many thanks

    There is no such thing as a 'sole trader' company. Now you can own a company and be the only shareholder but that is not a 'sole trader'.

    I suspect a newly formed company with no accounts would find it difficult to raise a mortgage at sensible rates.

    Why don't you simply get a mortgage in your own name against the property?


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