Naturally, the primary focus of estate planning is capital preservation, so investing in the volatile AIM market to mitigate IHT might feel counter intuitive.

However, Business Property Relief (BPR) is a statutory relief available on investments in unquoted businesses, which includes companies listed on AIM.  Qualifying shares held at the time of death give 100% IHT relief subject to a minimum qualifying holding period of 2 years.

Now, capital preservation may not be the first investment objective associated with AIM, but actually if the market  is approached sensibly, then there is no reason to shy away from accessing this relief via AIM.

At our recent BPR Masterclass, held on 28 April at the BDO offices in London, Justin Waine from PUMA Investments demonstrated that there are many well established companies listed on AIM that also qualify for BPR. Here are some of the key points from his segment:

• The market has grown from just 10 companies to nearly 1,100 over the past 20 years
• Since 1995, the market value has increased from £82.2m to £72.1bn in March 2015
• 770 companies listed have market caps under £50m
• 85% of the market value of AIM is held in companies with market caps over £50m
• 4 companies have market caps over £1bn and 16 between £500m and £1bn

Justin targets well capitalised companies with unlevered balance sheets and defensible positions in their sector. He also favours family owned companies, as these are very often listed on AIM for the same reasons he is investing there – for the BPR relief – and will be managed conservatively to ensure wealth is passed on from one generation to the next.

So why does AIM have such a reputation for volatility?

Last month John Hughman from Investors Chronicle assessed the 100 largest companies listed on AIM. Hughman shows how some great performers have been buried under the poor performance of the commodities sector which has seen a decline in prices across the entire market.

The AIM All-Share Index has fallen 17% since the end of the first quarter of 2014.taking into account both the slide commodity prices and the increase in resource based listed companies on AIM (260, up from 246 in 2011) the value of those companies has collapsed from £37.4bn to just £8.1bn since 2011 – which accounts for a large part of the market’s underperformance.

Although the resources sector lost £29.3bn, overall AIM only lost £9.9bn. Stellar performances by consumer goods (76% growth since 2011), services (78%) and healthcare (108%) have made up for the underperformance in the resources sector.

So there is an investment case for BPR qualifying AIM shares. Not only are they accepted within ISAs and have higher levels of liquidity than unlisted assets, the right stock-picker can also identify lower volatility firms that can meet the principal objective of estate planning objective – capital preservation.

Our BPR Industry Report is due to be published this month and is available for free. You can pre-order your report by following this link here – https://goo.gl/eQ7KTq