Although the draft legislation is awaited it appears from the Budget papers that it will apply to all income tax reliefs that are currently uncapped.
This would therefore appear to include genuine commercial losses made by a self-employed individual running an unincorporated business.
Commenting, Andrew Gotch, chairman of the CIOT's Owner Managed Business Taxes sub-committee, said: "The CIOT appreciates that there has been public pressure upon the Government to ensure that those with high income cannot avoid tax by extensive use of tax shelters.
“However, introducing a cap on the amount of business losses that can be utilised in any one year would smack of being anti-business and mis-targeted at a time when businesses are trying to recover from the recession or expand.
"This would mean that a business that had losses of £100,000 brought forward from previous periods, eg. during the recession, and which made a profit of £100,000 during 2013/14 could only utilise £50,000 of the losses.
“It would seem inappropriate to charge tax on those small business owners, forcing them to continue to carry forward the balance of losses.
"The Government need to clarify whether this proposal includes loss relief for unincorporated businesses. We hope that they will ensure that it does not."
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