Selling off part of property to wholly owned sole trader company

[sheik_yerbouti]

Hi,

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

[Snorkerz]

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?