With respect, FB, I find your post very confused and confusing. However, I do know the law regarding property ownership and inheritance is complicated.

"A married couple own a house. It is in the name of only 1 person." Not sure what this means. An individual can own a house in their own name, whether married or not - being married does not mean the other partner is a joint owner. Normally the ownership of a house falls into one of these categories: sole ownership, joint tenancy, tenancy in common. If the partner of the sole owner has been sharing the house and the relationship ends (for whatever reason, death included), they may have some rights to continue to live there, though, unless they were married, this is likely to be for a limited time. The only circumstance that would give a non-owner more rights is if they had made some financial contribution, such as paying part of the mortgage.

"Yours sister & family do not have any say in how your mother gives away a house or any money whilst she is still alive ( assuming your mum is mentally competent)" Agreed. The family members cannot "challenge the deeds" in that sense.

"The step father has an interest in the house by being married to your mother. If your mother is not married to her partner he has no rights to the house in E&W but would have some rights in Scotland." Yes - subject to what I said above.

"Married he keeps his share but your mother can give away her share." No - he does not have a share just by being married to her; he would have to be a joint owner. However, if the mother did not include any reference to the house in her will, he might have some basis for challenging it. This does underline the importance of making a water-tight will.

"There is also the difficulties of inheritance tax if the person who dies leaves over £375K inc property & all assets (money, shares etc) if that person dies within 7 years of making a gift over £3k in any one financial year." Yes - the mother would need to stay alive for at least seven years after giving the house to her son for her "estate" to be free of inheritance tax. And there are further complications: if the house was given to the son as sole owner, would the mother expect to live in it rent-free? If so, it would be a "gift with reservation" and would effectively mean the seven-year rule for inheritance tax would not apply. If the son became a joint owner, then depending on whether this was as "joint tenant" or "tenant in common" different rules would apply.

"Say you were gifted the house today, value £150K then in 10 years sold the house for £200K you would be taxed on the £50K "profit" (less inflation and annual exemptions) as the house was not your home." This is capital gains tax, not inheritance tax. And yes, this does apply.

"Really you need to go and see a lawyer as your above scenario might be even more complex than some of the possibilities I have mwntioned above." I totally agree; the OP - and his mother - need a lawyer who is geared up to deal with property law, inheritance tax and capital gains tax. Perhaps I could also mention that the OP's mother might want to consider making a will putting the house into a trust - and here the law is very complicated indeed.

Edited by FP on 09/10/2013 at 11:43