Epitaxial layers of AlN and GaN were grown by gas source molecular-beam epitaxy on a composite substrate consisting of a thin (250 nm) layer of silicon (111) bonded to a polycrystalline SiC substrate. Two dimensional growth modes of AlN and GaN were observed. We show that the plastic deformation of the thin Si layer results in initial relaxation of the AlN buffer layer and thus eliminates cracking of the epitaxial layer of GaN. Raman, x-ray diffraction, and cathodoluminescence measurements confirm the wurtzite structure of the GaN epilayer and the c-axis crystal growth orientation. The average stress in the GaN layer is estimated at 320 MPa. This is a factor of two less than the stress reported for HVPE growth on 6H-SiC(0001).