Readers’ forum: Furniture business

I have a client Company A that forms part of a group of companies. Company A is a wooden furniture manufacturing company that has been struggling over the past few years.

The company has accumulated trading losses carried forward as at 1 January 2020 of about £5m all of which arose after 1 April 2017.

Company A is potentially going to acquire the trade of a third-party company which operates as a wholesale supplier of wood. There are no major changes planned to the acquired trade.

I would like advice as to whether it is possible for Company A to offset the brought forward losses of its furniture manufacturer trade against the profits that arise in the wholesale trade following the purchase of the business.

Is this offset possible or can Taxation readers tell me of any restrictions that might apply here?

Readers’ thoughts would be greatly...