From www.smsfadviser.com: An SMSF can invest in a unit trust as an alternative to establishing a limited recourse borrowing arrangement (LRBA), allowing greater resource pooling for asset acquisition.

The unit trust must be assessed for relatedness to the SMSF, as investments in related trusts may be subject to in-house asset rules, unless specific exceptions apply.

Utilising a non-geared unit trust structure offers advantages like the potential for tax deductions on borrowing for related parties and gradual acquisition of units by the SMSF without breaching regulations.