Director/50:50 Co-Owner trying to get a mortgage

A 50:50 director/owner is trying with great difficulty to get a mortgage. He has found one which looks promising but has been told that he will be penalised around £150/month for being classified as self employed, and has been told that only if he owns less than 25%,  is he considered to be an employee and will get the lower rate.

In that vein he has asked if he could become a 20% owner of the business by transferring his shares to his (unconnected party) co-director/owner for a period of time.  His salary is already large enough for the mortgage application, together with other earned evidenced income.

Are there any problems with this? Is it legal?

One concern that I have is that they currently own one share each, as shown in the last set of accounts to 31 March 2012 and on file with Companies House