Dhana Sabanathan
Dhana is a Partner in the Tax, Trusts and Succession team in London, part of the Firm's private wealth group. She joined Michelmores in 2023 from Winckworth Sherwood, where she was a Partner in the Private Business and Wealth team for over five years, and prior to that a Partner at an international law firm.
Dhana's experience is in the private client and wealth management sector, where she specialises in working with high net worth and ultra-high net worth individuals, family offices, entrepreneurs, corporates and owner-managed businesses. She advises significant family offices and in addition to UK based clients, acts for clients based in Europe, the US, Asia and the Middle East.
'Independently ranked' for Private Wealth Law in the Chambers High Net Worth Guide 2022 and recommended in the Legal 500, Dhana is also recognised in the Citywealth Leaders List as well as Eprivate Client. She is a contributing author at LexisNexis, a member of STEP and on the committee for the STEP City of London branch. She was awarded Silver in the "Woman of the Year – Business Growth Mid Size" category in the 2021 Citywealth Powerwomen Awards.
Dhana regularly writes articles on tax and trust updates (published in the Financial Times) and enjoys speaking at conferences, including hosting an annual conference for our intermediary contacts.
Practice Area
Panels
- Consulting Editorial Board
- Contributing Author
Qualified Year
- 2007
Membership
- STEP
Education
- Warwick University - LLB, Nottingham Law School for LPC
4 Contributions by Dhana Sabanathan
PRACTICE NOTES
Offshore trusts: trustee borrowing anti-avoidance under TCGA 1992 Sch 4B-4C: transfers of value, outstanding loans, deemed disposals and Sch 4C matching
STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime
Finance Act 2025 (FA 2025), which received Royal Assent on 20 March 2025, enacts the removal of the remittance basis of taxation and introduces a residence-based system from 6 April 2025. FA 2025 also makes residence, rather than domicile, the primary criterion for inheritance tax liability.
Other updates include:
Changes to the rules for assessing excluded property status
Abolition of the protected settlements status for offshore trusts
Amendments to overseas workday relief
For details on these reforms, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025.
The trustee borrowing rules, brought in during 2000, targeted a planning device known as a ‘flip-flop’. This mechanism enabled the settlor of an offshore trust to avoid a tax charge under section 86 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992), and permitted beneficiaries to escape a charge on capital payments under TCGA 1992, s 87...
Private Client
PRACTICE NOTES
Offshore trusts: UK Schedule 4C TCGA 1992 matching of capital payments where trustee borrowing (Schedule 4B) applies—pools, LIFO priority, OIG, non-residents, relevant settlements and beneficiary charges
STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime
Finance Act 2025 (FA 2025), which received Royal Assent on 20 March 2025, brings into law the abolition of the remittance basis of taxation and puts in its place a residence-based regime, taking effect from and commencing on 6 April 2025. Under FA 2025, domicile ceases to be the decisive criterion used in establishing liability to inheritance tax. Additional measures in FA 2025 comprise changes to the rules for excluded property status, the ending of protected settlements status for offshore trusts, and revisions to overseas workday relief. For guidance on these updates, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also further: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025.
When is Sch 4C in point?
A Sch 4C pool, i.e. a pool of gains to which Schedule 4C to the Taxation of Chargeable Gains Act 1992 (TCGA 1992) applies, is created when the trustees of a settlement make a transfer of value to which TCGA 1992, Sch 4B applies (Sch 4B transfer)...
Private Client
PRACTICE NOTES
Offshore trusts—transfers between settlements: TCGA 1992 s 90; matching OIGs and s 1(3) amounts; impact on capital payments; protected settlements, rebasing and trustee borrowing rules (UK)
Capital payments are generally taxed by setting them against available relevant income (ARI), offshore income gains (OIGs) and then capital gains, in that sequence respectively. Accordingly, where a trust has no ARI, distributions are matched first with OIG figures and ultimately with amounts then referable to section 1(3) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) (formerly s 2(2)), and those arising under TCGA 1992, s 87 or Schedule 4C. For commentary on OIGs, see the Practice Note: Offshore trusts—offshore income gains (OIGs). For guidance on matching capital payments, see Practice Notes: Offshore trusts—matching capital payments—section 87 TCGA 1992 and Offshore trusts—matching capital payments where the trustee borrowing rules apply—Sch 4C TCGA 1992.
Where there has been a transfer between settlements, the OIG figures and the s 1(3) amounts within each settlement are correspondingly adjusted accordingly. Accordingly, the tax treatment of any payment made from either settlement in the transfer year, or in later years, is likewise likely to be altered.
What is a ‘transfer’?
While a ‘transfer’ is not expressly defined, these rules do not apply to transfers where:
the transfer is for consideration in money or money’s worth; and
the consideration equals or exceeds the market...
Private Client
PRACTICE NOTES
UK offshore trusts: ARI calculation and matching rules (Transfer of Assets Abroad, OIGs, CGT), dry trusts and HMRC allocation—updated for FA 2025 context
STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime
Finance Act 2025 (FA 2025), which secured Royal Assent on 20 March 2025, brings an end to the remittance basis of taxation and installs a residence-based framework from 6 April 2025. For IHT, FA 2025 removes domicile as the primary driver of liability, establishing a residence-focused model instead.
Revisions to the rules for determining excluded property status;
Abolition of protected settlements status for offshore trusts; and
Amendments to overseas workday relief.
For details on these measures, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025.
Capital payments made by an offshore trust to beneficiaries who are UK resident and domiciled are subject to a series of tax hierarchy rules...
Private Client
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