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It is different from the old stamp duty in many ways. Registered social landlords will need to understand the new rules: although it's tenants that pay the tax, RSLs need to understand how it works, if only to explain this to new residents. Beware – it's complicated.

In principle, every new tenancy can attract SDLT, whether or not a written tenancy agreement exists or whether the tenancy is for one year or 999 years. In some cases, exemptions or reliefs will apply and no tax will be payable if the arrangement is actually a licence. The tax will usually be payable within 30 days of a tenancy's commencement date. It must be sent to the Inland Revenue with a completed land transaction return, which is itself a lengthy formal document.

Generally, land transaction returns are not required if the lease is for less than seven years and no duty is payable, although they may be required if the tenancy is or becomes periodic. Also, if the tax would be charged were it not for a relief, a land transaction return must still be completed. Penalties are levied for non-compliance.

Certain residential tenancies granted by registered social landlords will be exempt from SDLT, provided that they are:

• granted by a social landlord to one or more individuals to meet a local authority's statutory housing function n for an indefinite term, or terminable with a notice of a month or less
  
• granted by way of temporary rented accommodation, which the landlord itself has obtained on a short-term basis (under a lease of five years or less). Clearly, this will not apply to the majority of RSL lettings.

Other residential tenancies in specified "disadvantaged" areas will be subject to a special relief. If this relief applies, the threshold at which SDLT becomes payable on rent or premium is increased. Further details are available on the Inland Revenue website (www.inlandrevenue.gov.uk).

SDLT on leases is calculated on the basis of the premium paid for the grant of the lease.

A premium is a payment made in exchange for a lease. It is usually made at the time the lease is granted, and is usually only paid on long leases. It is similar to paying a lump sum for the purchase of a freehold property.

Where a premium is paid, the rent payable is usually very low, and is sometimes referred to as ground rent. Provided the premium is less than £60,000, the SDLT payable on it is usually 0%. This will be the case with most periodic or short-term tenancies, since a premium is rarely charged on such agreements.

SDLT is also payable on the rent's net present value. The tax is payable at a rate of 1% on the value in excess of £60,000. Although this threshold seems high, it does not correspond to the average annual rent on which stamp duty was previously worked out.

Beware – tenants could easily incur penalties for non-compliance with the stamp duty law without even noticing

The formula for calculating the value is fiendishly complicated. The Inland Revenue has provided an online calculator, but this only works if the correct data is entered, which is not as easy as it sounds.

Because it is calculated over the term, net present value can add up to a large sum of money. For example, a rent of £77 per week over a five-year term results in a value of about £26,000.

A particular problem arises in relation to periodic tenancies and short-term leases that continue beyond their initial term. Initially, periodic tenancies will be treated as a one-year fixed term. If they continue beyond that period, even by a day, they will be treated like a two-year fixed term. If they continue beyond two years, they will be treated as a three-year fixed term and so on.

The problem is that in due course, the net present value may reach a level at which tax (or more tax) becomes payable or the tenancy may reach a length at which a land transaction return must be filed, regardless of the net present value.

In either event, the tenant will become obliged to pay tax, or file a land transaction return within 30 days of the end of the previous deemed term. This will clearly give rise to problems for long-term periodic tenants, who could easily incur penalties for non-compliance without even noticing.

The same approach is also to be applied to fixed-term tenancies, or for fixed terms that legally can be extended. The only difference is that the initial period will be the contractual fixed term, which may be longer or shorter than one year.

What is of concern is how this will apply to tenancies drafted in the following form. Before the introduction of SDLT, the Inland Revenue had confirmed that if this wording was used, the tenancy would be treated as fixed period plus notice.

However, this contractual "solution" has been overridden by the new legislation. The rule is not set out, and even if it could be relied on as a matter of practice, the (artificial) fixed term would be followed by a periodic tenancy, so the second of the new rules would apply anyway.