The basic qualification rules for business property relief (BPR) are illustrated in the Flowchart - trading or investment business for BPR purposes.
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 mainly trading, but the scope of the relief is framed negatively. Thus, all businesses qualify unless they are wholly or mainly:
- dealing in shares or securities
- dealing in land or buildings
- making or holding investments
A business engaged in genuine property development should qualify (this is not an investment activi-ty).Executors of Piercy (deceased) v Revenue and Customs Commissioners  STC (SCD) 858 (sub-scription sensitive)
See the BPR guidance note.
Non-qualifying investment activities
The 'mainly' requirement means that the above prohibited land or investment activities will prevent BPR being available where they account for more than half of the total business operations. In determining whether a business qualifies for BPR, it is necessary to look at the nature of the business activities 'in the round'.