Your accountant is probably right.  To get the negative gearing benefit, the property needs to be held by a high income earning individual, unless you can get income into a trust to utilise the negative gearing loss. 

The issue with holding the property in an individual's name is the lack of asset protection, which would have been safer if the property is held by a discretionary trust instead.  Have you considered protecting the equity in the properties via a discretionary trust through a gift and mortgage back arrangement? That way, the equity in the properties are protected in the trust via a second mortgage while the individual owner of the property (presumably you) will still enjoy the negative gearing benefits.

Can you please explain the gift and Mortgage back concept, I am having trouble with the individual obtaining the negative gearing benefits when the property is not in thier name.  Will the gift constitute a sale for Capital Gains Tax purposes and 2nd will there be any stamp duty implications.  (QLD) If you gift the property to the trust what deductions will the individual have.

Eddie
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