Citywealth’s first interview of 2021 is with private client tax lawyer Dhana Sabanathan. Read on to find out about how she is helping UHNWs grapple with upcoming tax challenges.
Tell me about your role.
I advise high net worth individuals, family offices and offshore trustees in relation to UK tax and estate planning.
What does a typical day look like for you?
I check my emails first thing as with an international client base, we receive a lot of responses and queries overnight that can be actioned by the team whilst I am doing the school run. My day then consists of reviewing tax reports and estate planning documents in between client calls, catching up with the team (and emails) and some business development. Due to dealing with different time zones, the days tend to be quite long, but always varied, challenging and interesting.
Tell us about a recent client instruction.
Restructuring a significant prime central London real estate portfolio (in excess of £50million) held through offshore companies for a non-resident client and transferring the assets tax efficiently to the next generation. This matter was particularly interesting because the client owned freehold apartment blocks but had historically granted long leaseholds over some of the apartments. This meant that restructuring could have triggered “right of first refusal” rights for those tenants (which in a worst-case scenario would have meant a third-party tenant could have obtained the freehold for no consideration). Due to the expertise of my residential property colleagues, we were able to completely mitigate this risk for the client. I really enjoy matters where we can show the strength and depth of the wider private client team.
What challenges do your clients face and how are you helping your clients to overcome them?
Greater scrutiny from HMRC – Many clients are receiving nudge letters and we are seeing an increase in enquiries. Clients understand that in the current economic environment, there will be a greater focus on recovering tax from wealthy individuals.
Complexity of the tax rules, and the likelihood of future changes - there have been a number of reports on potential tax changes (including recently from the Wealth Tax Commission), and we have been guiding clients through what these changes may mean for them, and what they should consider doing now.
Passing on wealth to future generations – Many clients grapple with when and how to pass on their wealth, particularly whilst their children/grandchildren are young. We are increasingly asked to assist with family conversations about wealth and drafting family constitutions to aid communication between the generations.
What is your proudest professional achievement?
We recently closed a COP 8 enquiry for a client that was carried out by HMRC’s Fraud Investigations Service. The enquiry had lasted 2 years, with potentially £80million of tax at stake. We were able to close the enquiry with no further tax to pay. There is often a degree of uncertainty with HMRC enquiries (in this case the client did not have all of the paperwork to support the position we were taking), but the client always believed that I could conclude this in their favour as they had done nothing wrong. It was great to be able to prove them right. I was very proud of the positive way we were able to engage with HMRC on this matter.
Who do you most admire and why?
All the wonderful people working in the NHS. My husband, sister and brother-in-law are all doctors who have worked tirelessly during the pandemic. I couldn’t be more proud of them.
What three things would you take to a desert island?
A Room with a View by E M Forster
A stash of dark chocolate
Top tips for WFH?
Try to go for a walk every day – it’s great that we’re all saving time on our commutes, but it’s so important to get some time outside and some vitamin D. The solution to a complex legal problem will often come to be on or after a walk.
Check in regularly with your clients and colleagues – Some people may have more time on their hands or may be struggling with the current restrictions. I have had more meaningful conversations with clients and colleagues over zoom or the telephone than I would have thought possible prior to the pandemic.
If you weren’t in the private client industry, what else might you be doing?
A novelist or musician