currently doing this at the moment, you have to apply to planning for a change of use, eg granny annex.
there will need to be a stipulation on this that only a close member of family can live there. no council tax charges will apply if services are being provided from the main residence.
as with building regs, all windows, doors, argon filled, trickle vents, timber floor 100mmm cellotex between joists, roof vents, walls 60 mm cellotex dot and dabbed, ceiling joists 100 mm cellotex in-between , cross bonded with 50 mm thermoboard, . drainage inspected, water supply inspected,
what size armoured cable to supply, electrical cert, heating etc.
hope this helps.
No change of use on garage, when it comes to sell it will still be down on paper as a garage, and not a habitable dwelling.
any materials used will have to comply with current regulations with building control.