Hi All, I am interested in getting some opinion/input on the following scenario. This is a 'strategy' that I am trying to get my head around. Current situation: Person moves from one PPoR into a new PPoR. Keeps the old house as an investment property, and rents it out. Property still negatively geared. Finance LVR 100% for new PPoR. The issue: LVR on old PPoR (now investment) is only about 60%, and LVR on new PPoR is 100% (i.e. fully financed by new mortgage), and as such non deductible debt is higher than it would ideally be (and deductible debt in turn less than ideal situation). Potential solution: Establish a Unit Trust with client as the Trustee and Sole unit holder. Trust to then purchase 2/3 share of the Investment Property at market cost of $200,000 (Assume value of home at $300K). Outcome would be property ownership of ‘Tenants in Common’ 1/3 to customer, 2/3 to Unit Trust. Update required to client's Will to allow for distribution of unit entitlement in Unit Trust. Client use proceeds of $200K (equity released) from investment property to pay off the non-deductible new PPoR debt. Trust to carry forward losses (property negatively geared) to offset future Capital Gain on sale, which would also be eligible for 50% concession personally on distribution from trust to client. Additional issue: Trust will need additional funding to meet negative gearing losses. Would client simply loan this money to trust to be repaid on sale? N.B. Only 2/3 ownership of PPR suggested to reduce Stamp Duty costs, as 2/3 of property value is all that is required to clear client mortgage against prop. Benefits: $200,000 of non-deductible debt removed. This equates to interest savings of $15,000 pa (assume 7.5% rate). Reduced CGT Liability on eventual sale due to accrual of losses in trust. Losses held personally would be available as deductions in relevant income tax year only, with diminishing value due to other tax reduction strategies being applied. Costs to consider: Stamp Duty payable on transfer to Unit Trust. Accounting and advice fees initially and ongoing. Views/thoughts/opinions are most welcome! That's why we are here Has anyone heard of this strategy being used before? Can anyone direct me to some good reading on the matter. I find this type of scenario very interesting! Thanks, Lloyd.