Introduction

The basic qualification rules for business property relief (BPR) are illustrated in the Flowchart ― trading or investment business for BPR purposes.

For an overview of BPR, see the BPR overview guidance note.

Relevant business property

The main categories of relevant business property are set out in IHTA 1984, s 105(1). In broad terms the legislation is aimed at businesses that are wholly or mainly trading, but the scope of the relief is framed negatively. Thus, all businesses qualify unless they are wholly or mainly:

1. •

   dealing in shares or securities

2. •

   dealing in land or buildings

3. •

   making or holding investments

A business engaged in genuine property development should qualify (this is not an investment activity).

The shares in a holding company do not constitute an excluded business, unless the subsidiary