Hi all, I am going to present my thoughts from an analysis of my financial structures and how I intend to go about making them better - hopefully some less knowledgable than I (if there are any LOL) may get some benefit from the discussion and I also hope to get some critique of my analysis from those with a decent grasp of the concepts involved. I have very little experience in this area but have done my best to read all relevant books (very few available - eg Dale's books) and threads on Somersoft before making this post , so hopefully I will come across as at least partially compus on the subject. I should make it clear that I am not after specific advice - more just comment on my thought process and/or identification of any generic/practical problems with the new structures I have suggested. I will be consulting with my accountant on the nitty gritty shortly I will point out before I go on that I am not interested in setting up complex structures with transfer of property to superannuation. I'm only just past my 30th birthday and have no real interest in tying up assets. I should also say that asset protection and tax planning are both of great importance to me , but if I had to choose one structure over another where there there was a slight benefit to be gained in one direction or another , I'd take the best structure for tax planning as (all things being equal) I am not a huge liability risk (invest for a living) My Current Financial Position PPOR : Value approx 325k (owe 150k on simple P&I loan) = net equity of 175k IP : Value approx 475k (owe 310k on IO loan) = net equity of 165k Both properties are held in my name Equities: A substantial - and unencumbered - portfolio of equities (worth more than the 2 properties put together) are held within a DFT with myself as appointor and trustee and a corporate beneficiary (a company set up for this purpose) . Any profits unable to be distributed to family members are passed to the company , which pays tax - after tax profits of the company will either be loaned back to the trust at commercial rates or (depending on legal advice) held "on trust" by the DFT. This setup is not to avoid tax (as I could quite simply trade within the company) but for increased flexibility and simplicity (one trading account). Either way the company will have to distribute profits as dividends etc..........if I wish to receive these funds later on, Starting capital for the DFT was provided by myself and this therefore implies a loan from myself to the trust that is to be repaid to me at some time and is an asset of mine. Possible Weaknesses Indentified 1) I am in a position to use equity from my property loans in my name to purchase further properties but do not have an appropriate trust structure set up within which to achieve this 2) within the next 12-18 months I intend capping my stockmarket equity and moving much of my trading profits from the DFT into property/property development. Purchasing this property within the DFT would be ideal in terms of offsetting trading income against property losses but may compromise asset protection by mixing low and medium risk asset classes - the property may be best kept in its own (new) trust 3) the DFT owes me in excess of $ 250k which is good in terms of providing access to tax free lifestyle funds for myself but also causes an asset protection weakness 4) I am in a financial position (given the money owed to be my the trust) to eliminate all non-deductible debt by paying off the loan on my PPOR , but have not done so as I do not wish to be without the funds in the DFT trading account for any period of time. It would be best perhaps to pay out this loan and replace it with an investment loan drawn against the paid out property. Possible Solutions a) create a new trust for property Set up a new hybrid discretionary trust (HDT from here on) so that properties can be purchased tax effectively from equity drawn in my name. It will be set up with a corporate trustee (could be the beneficiary company of my DFT) After tax profits within the DFT could also be used to purchase income units in the HDT , thus allowing me to effectively move DFT profits into property. I need to look further into the asset protetion situation in terms of the HDT. It appears the assets of the trust are at risk due to immunity offered to the trustee in many circumstances - is it compulsary that the trustee takes that immunity??? I also need to investigate the relevant clauses needed in the deed to make the income units as unattractive as possible to others ( giving trustee options regarding returning nominal capital at his discretion, only being able to redeem so many units pa unless at the trustees discretion etc.......) b) DFT loan cancellation (gift) Gifting the money would protect it from personal litigaton but would reduce access to tax free funds. I assume the process of gifting involves little more than a minute and having it reflected in the accounts of the trust as a liability cancelled. The next idea would use much of this loan money anyway............. c) Restructure personal property loans The way I see it , I have a couple of options here and one much more complicated than the other , but perhaps worth a go. i) simply refinance the properties to 80% LVR and use the equity released to buy units in the HDT. Refinance periodically to keep maximum gearing on the properties in my name. , OR ii) simulataneously borrow $150k within the DFT and pay myself back $150k the DFT owes me - this will maintain my trading capital within the DFT. Use the $150k to pay out my PPOR P&I loan . Draw an IO investment loan/LOC against my PPOR and refinance the investment property loan as before. Use the available funds to purchase units in the HDT when a property opportunity arises. In either case I would regularly revalue the properties in my name and extend the equity as available. That's all folks!!!! I will be consulting one of Somersoft's resident mortgage brokers for advice on loan structures that provide maximum equity/flexibility with minimum cashflow drain etc........feel free to pick me to pieces Cheers, Ed. .