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There's no place like home for non-profit investorsBy Ian PerryChief Financial Officer

Australian investors are well known for their home bias when it comes to investing in equities, despite the local bourse only making up around 2% of the world's market capitalisation.1There are certainly some good reasons for this trend. The Australian economy has proved resilient during downturns, weathering the dot com bubble in 2000 due to a smaller than average technology sector, and outperforming other nations during the Global Financial Crisis and Covid-19 pandemic as a result of its strong commodities exports.Another major drawcard for local investors is franking credits (also known as imputation credits). This is a type of tax credit that allows taxes paid by companies to be passed on to shareholders to avoid double taxation. These franking credits can be used to reduce income tax payable on dividend income or can potentially be received as a tax refund.Tax concessions for the non-profit sector Currently, entities that are endorsed by the ATO as income tax exempt entities and deductible gift recipients (DGRs) can apply for a refund of franking credits.For example, Uniting Financial Services’ Ethical Managed Funds range, which have direct or indirect exposures to Australian equity investments, pass on franking credits to unitholders as part of their quarterly distributions as received by the Fund. If eligible, your organisation may effectively receive a fifth cash flow each year (in addition to the quarterly distributions of income from investments in UFS managed funds) in the form of a franking credit refund from the Australian Taxation Office. Information about franking credits can be found in the tax statements received, along with your distribution statements. Preparing for tax time If your organisation is applying for a franking credit refund for the first time, you will need to contact the ATO on 1300 130 248 to request the form Application for Refund of Franking Credits – Endorsed Income Tax Exempt Entities and Deductible Gift Recipients (NAT 4131). This, along with helpful tips on how to complete the form, is available on the ATO website. Once you have completed this process, the ATO will send you a personalised version of the (NAT 4131) form at the end of each financial year. This must be completed with details regarding the dividend income received, as per your organisation’s tax statement. Get the right advice As taxation is a specialist area, we recommend seeking advice on how to manage investments tax-effectively. There are also other factors your organisation must consider beyond your taxation position when making a decision on the right assets to invest in. These include your risk appetite, whether the investment is for a short or long-term goal and whether your portfolio will be adequately diversified across different geographies, asset classes and sectors.More information If you would like more information on the process to undertake to claim a refund of franking credits, Uniting Financial Services has compiled a process overview document. To receive your copy, please contact FundOps@unitingfinancial.com.au.  1.      1. Factset, 31 May 2021Important information: The Uniting Financial Services (UFS) unregistered managed investment schemes are available for investment only to wholesale investors. Prospective wholesale investors who wish to invest via our unregistered managed investment schemes can access the Information Memoranda for these any of these funds on the UFS website. While the information in this email has been prepared with all reasonable care, UFS accepts no responsibility or liability for any errors, omissions or misstatements however caused. No action has been taken to register or qualify these products or otherwise permit a public offering of these products in any jurisdiction outside Australia. Past performance is not indicative of future performance. You can review the UFS Privacy Policy here.

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  Important for you to know Financial services are provided by The Uniting Church (NSW) Trust Association Limited ACN 000 022 480, ABN 89 725 654 978, AFSL 292186 (“UCTAL”) and by The Uniting Church in Australia Property Trust (NSW) ABN 77 005 284 605 (“UCAPT”) (together and separately “Uniting Financial Services”), for The Uniting Church in Australia, Synod of NSW and the ACT (“Synod”), under a s.911A Corporations Act 2001 (Cth.) authorisation and pursuant to APRA Banking Exemption No. 1 of 2021 and ASIC Regulatory Guide 87 and ASIC Corporations (Charitable Investment Fundraising) Instrument 2016/813 exemptions. Uniting Financial Services® is a registered trademark of UCTAL used with permission of UCAPT. None of The Uniting Church in Australia, UCAPT and UCTAL is prudentially supervised by APRA. Therefore, investments with or contributions to these Uniting Church organisations will not receive the benefit of the Financial Claims Scheme or the depositor protection provisions in the Banking Act 1959 (Cth.). All financial services and products are designed for investors who wish to promote the religious and charitable purposes of Uniting Financial Services and The Uniting Church in Australia and for whom profit considerations are not of primary importance in their decision to invest. The information on this page has been prepared without considering your objectives, financial situation or needs. You should, before acting on it, consider its appropriateness to your circumstances or refer to the relevant disclosure document. Loan applications are subject to credit approval. Interest rates are subject to change. Fees and charges may apply.