Tax is simple. That is, if the Office for Tax Simplification and the Tax Law Rewrite Project are to be believed.

Rob Thompson is head of real estate London at Irwin Mitchell.

In reality, the UK has one of the most complicated tax systems in the world, with considerable misunderstanding about reliefs available, nervousness about non-compliance and numerous tax traps for the unwary, even on genuine real estate transactions.

And while HMRC has been tasked with collecting as much tax as possible and stamping out aggressive tax practices, it should not be at the cost of making the tax system comprehensible only to the specialists.

Take capital allowances, for example. I have seen transactions where sellers, without any negotiation, simply accept that such allowances transfer to the buyer, resulting in the loss, sometimes of tens (if not hundreds) of thousands of pounds of tax relief for no consideration. I’ve also seen purchasers not claiming capital allowances they are entitled to because they don’t understand how they work and don’t want to pay advisers in case they are not entitled to them.

Stamp duty land tax (SDLT) is another minefield. Often, SDLT is due when you wouldn’t have expected it to be, and the regime contains many hypothetical concepts that would lead you to the conclusion that whoever drafted it had no experience of UK real estate transactions.

Then there is VAT, which, at up to 20%, can be very costly if not recovered. It is often stated that VAT incurred should only create a cashflow cost, but because of a lack of understanding of the VAT regime, it can regularly end up being a real cost to the deal. And, even worse, there is the double whammy that SDLT is payable on VAT, a tax on a tax.

In addition to existing tax rules, we have recently had targeted anti-avoidance legislation layered on top and now a new general anti-avoidance rule introduced. This legislation could lead to much uncertainty for real estate transactions.

With tax revenue generation still high on the government’s agenda, it is unlikely that the complexities of the system will be addressed soon. If anything, it is likely to become more complex.

Isn’t it time we had a tax system that reflects reality, that can be applied to real transactions and be easily understood? This would lead to greater liquidity in the UK real estate market and we would all sign up to that, wouldn’t we?

Rob Thompson is head of real estate London at Irwin Mitchell