You must have owned the business for 2 years or more or have sold  a previous business that was owned for 2 years and bought the new one within 3 years.
 
It must be a business that is wholly or mainly trading. So businesses that deal in stocks, shares and securities or land and buildings or make or hold investments will not apply. The most common situation is a company that owns houses and flats that are rented out. This type of company cannot benefit from BPR. The Revenue will need at least 50% of the business to be a trading business.
 
Investments in Companies listed on the Alternative investment market or packaged investment schemes will qualify provided the underlying businesses are trading businesses.
 
The relief from IHT will be 100% where the type of asset held is a business or partnership or unquoted shares  in a company, and 50% where the shares are quoted but give control of the company (usually 50%), is land or buildings machinery or plant used wholly or mainly for the purposes of a business carried on by a company or partnership, land or buildings machinery or plant available under a life interest and used in a business carried on by a beneficiary.
 
But these benefits are generous and this is an area which could see changes in the future.

If you would like additional information regarding this article, please contact Jean Newton, Partner and Head of Private Client on 01905 721600.