In this paper, we have systematically investigated parasitic effects due to the gate and source-drain engineering in multi-gate transistors. The potential impact of high-K dielectrics on multi-gate MOSFETs (MuGFETs), such as FinFET, is evaluated through 2D and 3D device simulations over a wide range of proposed dielectric values. It is observed that introduction of high-K dielectrics will significantly degrade the short channel effects (SCEs), however a combination of oxide and high-K stack can effectively control this degradation. The degradation is mainly due to the increase in the internal fringe capacitance coupled with the decrease in gate-channel capacitance. From the circuit perspective, an optimum K value has been identified through mixed mode simulations. Further, as a part of this work, the importance of optimization of the shape of the spacer region is highlighted through full 3D simulations.