The heir cannot fully make use of the tax exemption for business assets within the meaning of §§ 13a, 13b Inheritance and Gift Tax Act (IGTA) if he sells privileged assets within the five years holding period and does not reinvest in privileged assets.
It is not of relevance if the assets eligible for being privileged consist of an interest in a commercial partnership (§ 13b para. 1 no. 2 IGTA) or shares in corporation with a direct share of more than 25% of the nominal capital (§ 13b para. 1 no. 3 IGTA).
For more details regarding the holding regulations of privileged business assets see Koeniger, The German Inheritance and Gift Tax, 2017, p. 195 et seqq.