Property portfolio

My client is retired and has a substantial portfolio of properties which are let. He is currently obtaining planning permission to build two flats on land where he previously let three garages and a tranche of the garden of an adjacent property which he owns and lets. When completed he proposes to keep and let one flat but to pass the second flat to his builder either as payment for his labour and materials or to sell it to the builder while he pays all the costs of materials and labour.

Once the development is complete he may seek to obtain planning permission to convert the adjacent house which is at present in multiple occupation to two flats. Both flats would be retained and let.

I have several concerns as to the best way to structure the transaction. Would the disposal be treated as a...