Purchasing Entity / Trusts

When i first looked into trusts my understanding was that you could either get asset protection (discretionary) and lose tax benefits of negative gearing. Or you could keep the negative gearing but not achieve asset protection. For any scheme that claimed to give both (ie hybrid trusts) then you risked losing both asset protection AND negative gearing. As ATO seems keen to rule against such trusts, and testing of the asset protection is rare and not widely reported.

Before my next purchase i would like to understand a good purchasing entity / financial structure. I am more interested in being able to push the financial envelope than concerned about asset protection. However if both can be economically achieved then happy to do so…

So from iClub Master Class Starter pack

If i understand Steve McKnights structure correctly it is something like this
1) Company at the top

2) Discretionary trust below this

3) Benficiariies below this might be (ie family members (one high earner one low earner and two dependants + Another Company).

Unfortunately not enough questions were asked around this to establish what the positives and negatives to this structure were.

Questions
A) What are tax implications? ie negative gearing. I would like to see 4 tax years returns for this structure (together with the individuals tax return)
Year 1 – Purchase
Year 2 – Hold with negaitve cash flow
Year 3 – Hold with positive cash flow
Year 4 – Sell (allocate capital gains)

Why the need for two companies (this may become obvious after Question above)

C) One of the stated benefits was that as the trust was doing the borrowing, it is the trusts name that appears on lending documentation. The individual(s) was still required to go Guarantor for the loan. This helps with the finance brick wall. As the trust is responsible for the debt, and it is only when the trust defaults that the individual guarantors become responsible for debt.
If every property is purchased this way then the individual is only DIRECTLY responsible for each deposit, and each individual trust is responsible for the remaining debt. So when going for the next loan application you only need to declare the deposit debt. The trust debt is not yours (until such time as the trust defaults), and so would not need to be declared on the finance application.
Has any one tried this? Is it correct? Comments welcomed.