CT UK High Income Trust : Annual Report and AGM Notice

Annual Report and Financial Statements

CT UK

High Income

Trust PLC

For the year ended: 31 March 2024

Contents

Overview		Report of the Engagement and Remuneration Committee	41
Company Overview	1	Report of the Audit Committee	42
Financial Highlights	2	Directors' Remuneration Report	46
Summary of Performance	3	Statement of Directors' Responsibilities	49
Strategic Report		Independent Auditor's Report	50
Chairman's Statement	5
Purpose, Strategy and Business Model	7	Financial Report
Key Performance Indicators	9	Financial Statements	58
Manager's Review	10	Notes to the Financial Statements	62
Manager's Investment Philosophy and Process	12	AIFMD Disclosures	77
Classification of Investments	14
Investment Portfolio	15	Notice of Meeting
Sustainability and ESG	17	Notice of Annual General Meeting	78
Promoting the Success of the Company	22
Principal Risks and Uncertainties and Viability Statement	24	Other Information
Principal Policies	27	Capital Structure	82
		Shareholder Information	83
Governance Report		How to Invest	84
Board of Directors	29	Ten Year Record	85
Report of the Directors	30	Alternative Performance Measures ('APMs')	87
Corporate Governance Statement	37	Glossary of Terms	89
Report of the Nomination Committee	40	Corporate Information	91

Financial Calendar

Annual General Meeting			26 July 2024
First quarter's distribution paid	(XD Date 4	July 2024)	2 August 2024
Second quarter's distribution paid	(XD Date 3	October 2024)	1	November 2024
Announcement of Interim Results			December 2024
Third quarter's distribution paid	(XD Date 2	January 2025)	7	February 2025
Fourth quarter's distribution paid	(XD Date 3 April 2025)	2	May 2025
Announcement of Annual Results			May 2025

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take, you are recommended to seek your own independent financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended by the Financial Services Act 2012) if you are in the United Kingdom or, if not, from another appropriately authorised financial adviser. If you have sold or otherwise transferred all your shares in CT UK High Income Trust PLC please forward this document, together with the accompanying documents, immediately to the purchaser or transferee or to the stockbroker, bank or agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. If you have sold or otherwise transferred only part of your holding of shares, you should retain these documents.

CT UK High Income Trust PLC

Overview

Company Overview

CT UK High Income Trust PLC (the 'Company') is an investment trust and its shares are listed on the premium segment of the Official List of the Financial Conduct Authority and traded on the London Stock Exchange.

Purpose

The purpose of the Company is to be a cost effective investment vehicle for investors seeking income and capital returns from a portfolio invested predominantly in UK equities.

Investment Objective

The investment objective of the Company is to provide an attractive return to shareholders each year in the form of dividends and/or capital repayments, together with prospects for capital growth.

In pursuit of its objective, the Company invests predominantly in UK equities and equity related securities of companies across the market capitalisation spectrum.

Capital Structure

The Company has two classes of shares: Ordinary shares and B shares. The rights of each class are identical, save in respect of the right to participate in distributions of dividends and capital. The net asset value attributable to each class of shares is the same.

Only Ordinary shares are entitled to dividends paid by the Company. B shares, instead of receiving dividends, receive a capital repayment at the same time as, and in an amount equal to, each dividend paid on the Ordinary shares.

Overview

Strategic Report

Governance Report

Auditor's Report

Financial Report

Visit our website at ctukhighincome.co.uk

The Company is registered in Scotland with company registration number SC314671

Legal Entity Identifier: 213800B7D5D7RVZZPV45

Forward looking statements

This document may contain forward looking statements with respect to the financial condition, results of operations and business of the Company. Such statements involve risk and uncertainty because they relate to future events and circumstances that could cause actual results to differ materially from those expressed or implied by forward looking statements. The forward looking statements are based on the Directors' current view and on information known to them at the date of this document. Nothing should be construed as a profit forecast.

Report and Accounts 2024  |  1

Notice of Meeting

Other Inf rmation

Overview

Financial Highlights

+11.8%	NAV total return(1)	of +8.4%.
compared to the total return of the Benchmark(2)
	Net asset value total return per share for the financial year was +11.8%,

+10.2%	Ordinary share price total return(1)	of +8.4%.
compared to the total return of the Benchmark(2)
	Ordinary share price total return per share for the financial year was +10.2%,

B share price total return(1)

+5.5% B share price total return per share for the financial year was +5.5%, compared to the total return of the Benchmark(2) of +8.4%.

6.7%	Yield(1) on Ordinary shares
Distribution yield of 6.7% on Ordinary shares at 31 March 2024, compared
to the yield on the FTSE All-Share Index of 3.8%. Total dividends increased by

2.0% to 5.62p per Ordinary share compared to the prior year.

6.7%	Yield(1) on B shares
Distribution yield of 6.7% on B shares at 31 March 2024, compared to the yield
on the FTSE All-Share Index of 3.8%. Total capital repayments increased by

2.0% to 5.62p per B share compared to the prior year.

1. Yield and total return - See Alternative Performance Measures on pages 87 and 88.
2. Benchmark - FTSE All-Share Index.

Investors are reminded that the value of investments and any income from them may go down as well as up and they may not receive back the full amount invested. Tax benefits may vary as a result of statutory changes and their value will depend on individual circumstances.

2|  CT UK High Income Trust PLC

Overview

Summary of Performance

Overview

Total Return(1)

Net asset value per Ordinary share and B share

Ordinary share price

B share price

Benchmark(2)

Year to	Year to
31 March	31 March
2024	2023
+11.8%	-0.4%
+10.2%	+0.6%
+5.5%	+2.3%
+8.4%	+2.9%

Strategic Report

Governance

Revenue and Distributions

	Year to	Year to
	31 March	31 March
	2024	2023	% Change
Distributions per Ordinary share and B share	5.62p	5.51p	+2.0
Yield(1) - Ordinary share	6.7%	6.7%
Yield(1) - B share	6.7%	6.5%
Revenue earnings per share	4.01p	3.62p	+10.8
Revenue reserve - per Ordinary share(3)	2.77p	2.83p	-2.1
Capital
	31 March	31 March
	2024	2023	% Change
Net assets	£107.8m	£104.2m	+3.5
Net asset value per Ordinary share and B share	94.51p	89.97p	+5.0
FTSE All-Share Index	4,338.05	4,157.88	+4.3

Discount(1)

Report

Auditor's Report

Financial Report

Ordinary shares

B shares

Gearing(1)

Gearing

Ongoing Charges(1)

-10.6%		-8.9%
-11.6%		-6.1%
12.5%		8.5%

Notice of

as percentage of average shareholders' funds	1.08%	1.02%

1. Total return, yield, discount, gearing and ongoing charges - see Alternative Performance Measures on pages 87 and 88.
2. Benchmark - see definition on page 2.
3. Calculated after deducting the fourth interim dividend (which was paid after the year end) from the revenue reserve at 31 March. Sources: Columbia Threadneedle Investments and Refinitiv Eikon.

Report and Accounts 2024  |  3

Meeting

Other Information

Overview

Annual dividends and Capital repayments

Growth in payments to shareholders

over last ten financial years

Pence per share

6

5

4

3

2

1
0	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024

1st interim 2nd interim 3rd interim 4th interim Source: Columbia Threadneedle Investments

Yield %

Distribution yield compared to the Benchmark Index

and Peer Group at 31 March 2024

7

6

5

4

3

2

1

0

Ordinary shares	B shares	FTSE All-Share	UK Equity Income Sector -
- Distribution Yield	- Distribution Yield	Index - Yield	AIC Peer Group - Yield
Source: Refinitiv Eikon and AIC

Cumulative Performance to 31 March 2024

%
90											75.3
80
70											56.7
60
										53.0
50											41.0
40
						26.1			30.3
30
							22.6	21.3	19.2
20					13.4
11.8	10.2	5.5	8.4	11.6	9.7
10
0			1 Year				3 Years			5 Years	10 Years
Net Asset Value total return		Ordinary share price total return	B share price total return	Benchmark - total return

Source: Columbia Threadneedle Investments and Refinitiv Eikon

4|  CT UK High Income Trust PLC

Strategic Report

Strategic Report

This Strategic Report, which includes pages 5 to 28 and incorporates the Chairman's Statement, has been prepared in accordance with the Companies Act 2006.

Chairman's Statement

"Eleventh consecutive year of dividend/capital repayment increases and at 31 March 2024 the Ordinary shares and B shares had yields of 6.7%"

Andrew Watkins, Chairman

Overview

Strategic Report

Governance Report

I am pleased to present the annual results of CT UK High Income Trust PLC for the financial year ended 31 March 2024. Particularly pleased, in fact, as against a backdrop during the year of high interest rates and inflation in the UK and an escalation of global tensions, David Moss, the Company's Portfolio Manager has produced index-beating returns and generated an increase in dividends and capital repayments.

These have not been easy times. I hope that one day I shall not have to write such words and that investment managers, to whom shareholders have entrusted their savings, will find the investment universe easier to navigate. But for now, our daily lives seem to be peppered with news of yet another conflict that threatens world peace. I see that this time last year I believed that "the worst is behind us". Palpably wrong. Russia seems to have settled in for the long term in its desire to rebuild the old Soviet Union through destroying Ukraine and the Israel-Palestine war shows little sign of any permanent resolution in the short term. How does one manage money in such unpredictable times?

Well, I'm delighted to say that your Portfolio Manager has indeed maintained his focus and concentrated on the Company's priorities for its shareholders, namely, the growth in capital and dividends. Over the last few years, the Board has employed the Company's revenue reserve to maintain and grow distributions and this year is no exception. However, the Portfolio Manager is very well aware of - and is delivering upon

• the Board's stated objective to rebuild revenue reserves and the principal reason for drawing on reserves again this year was the timing of dividend payments from investee companies that occurred after our year end.

Performance

In the financial year to 31 March 2024 your Company produced a Net Asset Value ('NAV') total return of +11.8% against a total return of +8.4% from the FTSE All-Share Index, the benchmark index. This is a very welcome and highly commendable outperformance of +3.4 percentage points from the Company's Portfolio Manager, David Moss. This was especially so during another challenging economic period which saw inflation peak at 11.1% in early 2023 with an attendant rise in the Bank of England base rate to 5.25% in a belated attempt to combat inflation's harmful effects on consumers and the UK economy.

As you will read in the detailed Manager's Review, the portfolio has been fine-tuned since the appointment of David Moss in July 2023 to take account of changing market conditions and sentiment, an approach applauded by your Board as being not only sensible and pragmatic but also in the best long-term interests of shareholders.

The Board also concurred with David that the Company should remain geared throughout the period. This proved painful as interest rates rose but, as he was confident that positions in quality companies could be acquired at reasonable prices, it proved tactically correct to do so. Altering gearing levels on

a play-by-play basis seldom proves beneficial and whilst the Company has a flexible revolving credit facility, maintaining full exposure was a unanimous decision.

Auditor's Report

Financial Report

Notice of Meeting

Other Information

Report and Accounts 2024  |  5

Strategic Report

Share Price Performance and Discount to NAV

At the financial year end, the Company's Ordinary share and B share prices stood at discounts to the net asset value of 10.6% and 11.6% respectively. These discounts were wider than the Board would prefer but may have been affected, temporarily, by adjustments in the market as the Company's Units were cancelled at the very end of its financial year. The average discount levels at which the Company's Ordinary shares and B shares traded relative to net asset value in the financial year were 6.9% and 5.2% respectively and it remains the Board's preference for the discounts to be in single figures whilst maintaining the balance of supply and demand in the market for both share classes on a daily basis.

Consequently, the share price total return for the Ordinary shares and B shares was +10.2% and +5.5% respectively.

Dividends and Capital Repayments

As already mentioned, your Board recognises the importance of dividends to shareholders and has utilised the Company's revenue reserve to maintain and increase dividend payments to Ordinary shareholders in recent years. Total distributions to shareholders this year increased by 2% to 5.62p per share compared to the previous year. In the year to 31 March 2024 the revenue earnings per share increased by 10.8% but, due to the timing of some dividend receipts, as explained earlier, it has been necessary to draw £105,000 from the revenue reserve. This is a very short-term situation as those companies that were due to pay in March duly paid in April 2024. After payment of the fourth interim dividend on 3 May 2024, the revenue reserve is £2.3 million, representing 2.77p per Ordinary share.

Your Company has now increased its distributions to shareholders in each financial year since 2013 and has been duly recognised by the AIC as being part of the next generation of "Dividend Heroes" for increasing dividends to shareholders in ten or more consecutive years. The total dividend/capital repayment for the year to 31 March 2024 represented a yield of 6.7% based on the Ordinary share price and B share price of 84.5p and 83.5p respectively at 31 March 2024.

Gearing

As at the end of the year under review, the Company had a total borrowing facility of £15 million through an unsecured Revolving Credit Facility with The Royal Bank of Scotland International Limited. Your Board believes that an investment company should use gearing to enhance returns to shareholders whenever possible and encourages the Portfolio Manager to use his discretion accordingly. As at the year end, all of the £15 million facility had been drawn down.

Annual General Meeting (AGM)

The AGM will be held at 11 am on 26 July 2024 at Columbia Threadneedle Investments, Cannon Place, 78 Cannon Street, London EC4N 6AG. It is an opportunity for shareholders to engage with the Board and Manager and I hope you will be able to attend.

Outlook

It is a relief for all to see that, in spite of recent tensions, energy prices have come off their highs and domestic bills have correspondingly fallen. Combined with average wage increases now exceeding inflation, it feels that discretionary spending power is improving despite it seeming that the cost of everything is still going up. Personally, I would not be surprised if manufacturers attempted to rebuild profits through price rises but competition is a great leveller when vying for the consumer's money.

So, that was a long-winded way of saying that my (relatively) optimistic outlook is back. With a General Election now called for 4 July 2024, whichever party forms the next Government is likely to oversee a slowly growing economy, inflation possibly at the Bank of England's target 2% rate accompanied by a very welcome (and overdue) fall in interest rates. Global tensions notwithstanding and assuming no major escalation or serious interruption to trade routes, it is possible to envision a much better environment for UK equities after a tough few years of treading water.

If my reading is correct, I firmly believe your Company is in the best possible shape to benefit accordingly. David Moss has constructed a balanced portfolio of companies with the potential to grow in capital terms and increase dividend payments, exactly the recipe required to produce positive returns for you, our shareholders. It is likely that the portfolio will remain geared during the Company's 2024-2025 financial year to capitalise accordingly, especially as interest rates decline and the cost of borrowing reduces. Making the most of the closed-ended structure of an investment company by gearing at appropriate times is wholly supported by your Board and should, I hope, reap rewards over the next 12 months.

As ever, thank you for being a shareholder in CT UK High Income Trust PLC. Your support is very much appreciated.

Andrew Watkins

Chairman

30 May 2024

6|  CT UK High Income Trust PLC

Strategic Report

Overview

Purpose, Strategy and Business Model

Purpose and Strategy

The purpose of the Company is be a cost effective investment vehicle for investors seeking income and capital returns from a portfolio invested predominately in UK equities.

The investment objective is to provide an attractive return to shareholders each year in the form of dividends and/ or capital repayments, together with prospects for capital growth. We do this by investing predominantly in UK equities and equity related securities of companies across the market capitalisation spectrum. Our wider strategy is to promote the Company as a compelling investment choice through all available channels.

Business Model

CT UK High Income Trust PLC is a listed closed-end investment company and carries on business as an investment trust.

As an investment company with no employees, the Directors believe that the best way of meeting their duty to promote the success of the Company and achieving its investment objective for the benefit of stakeholders is to work closely with its appointed Manager. The Board has contractually delegated the management of the investment portfolio, and other services, to Columbia Threadneedle Investment Business Limited

(the 'Manager') which is owned by Columbia Threadneedle Investments, the global investment management business of Ameriprise Financial, Inc. ('Ameriprise') a company incorporated in the United States. Within policies set and overseen by the Directors, the Manager has been given overall responsibility for the management of the Company's assets, gearing, stock selection and risk management. Engagement on environmental, social and governance ('ESG') matters is undertaken through a global team within Columbia Threadneedle Investments.

As a listed closed-end investment company, the Company is not constrained by asset sales to meet redemptions. The Company's capital structure provides the flexibility to take a longer term view and to remain invested while taking advantage of volatile market conditions. Having the ability to borrow

to invest is a significant advantage over a number of other investment fund structures. These features combine to form a resilient and adaptable business model.

The Company's Board of non-executive Directors is responsible for the overall stewardship and governance of the Company and how it promotes the success of the Company is set out on pages 22 and 23. The Board's biographical details can be found on page 29. The Company has no executive Directors or employees.

The Board remains responsible for decisions over corporate strategy, corporate governance, risk and control assessment,

setting policies as detailed on pages 27 and 28, setting limits on gearing and monitoring investment performance.

Alignment of Values and Culture

In addition to strong investment performance from our Manager, we expect it to adhere to the highest standards of responsible investment, transparency, corporate governance and business ethics and that its values and culture align with our own. Columbia Threadneedle Investments was an original signatory to the United Nations Principles for Responsible Investment ('UNPRI') and in 2023, across each reporting module, it scored in line or above the investment management median. The Manager has a culture of diversity, collaboration and inclusion, anchored by shared values and industry-leading employee engagement in keeping with the Board's own expectations and beliefs.

Responsible Investment Impact

Environmental, Social and Governance ('ESG') issues can present both opportunities and threats to the long-term investment performance the Company aims to deliver and its approach, as set out on pages 17 to 21, is aligned towards the delivery of sustainable investment performance over the longer term.

The direct impact of the Company's activities on the community or environment is minimal as it has no employees, premises, physical assets or operations, either as a producer or a provider of goods and services, and it does not have customers in the traditional sense. Consequently, it does not directly generate any greenhouse gas or other emissions or pollution. The Company's indirect impact occurs through its investments and this is mitigated by the Manager's Responsible Investment approach as explained on pages 17 to 21.

The Manager

A summary of the investment management agreement is contained in note 4 to the financial statements. The Manager also acts as the Alternative Investment Fund Manager ('AIFM') under the Alternative Investment Fund Managers Directive ('AIFMD') and provides ancillary functions such as administration, marketing, accounting and company secretarial services to the Company.

During the financial year, on 13 July 2023, the Board announced that David Moss would succeed Philip Webster to act as the Portfolio Manager ('Portfolio Manager') to the Company, on behalf of the Manager. David has 28 years' industry experience, the majority of them in managing assets on behalf of a wide variety of clients, including investment trusts. He is supported in carrying out research and in the selection of stocks by a team of investment professionals. Details of the Manager's investment philosophy and process are set out on pages 12 and 13.

Strategic Report

Governance Report

Auditor's Report

Financial Report

Notice of Meeting

Other Information

Report and Accounts 2024  |  7

Strategic Report

Manager Evaluation

Investment performance and responsible ownership are fundamental to delivering the investment objective for shareholders and therefore an important responsibility of the independent non-executive Board of Directors is the robust annual evaluation of the Manager. This evaluation is an essential element of strong governance and mitigation of risk. The process for the evaluation of our Manager's performance and its capabilities and resources for the period under review, which was conducted by the Engagement and Remuneration Committee, and the basis on which the re-appointment decision was made, is set out on page 41.

Investment Policy

The Company's investment policy is set out on page 27 and an analysis of the investment portfolio is contained on pages 14 to 16.

Any material change to the investment policy of the Company will only be made with shareholder approval.

Managing Risks and Opportunities

We seek to make effective use of our corporate structure and the investment opportunities that lead to long-term growth in capital and income for our shareholders. These opportunities do not come without risks and therefore the performance of our Manager is monitored at each Board meeting on a number of levels. In addition to managing the investments, ancillary functions such as administration, marketing, accounting and company secretarial services are also carried out by the Manager. At each Board meeting it reports on the Company's investment portfolio, performance, recent portfolio activity, market outlook, revenue and expense forecasts, internal control procedures, any errors, marketing, shareholder and other stakeholder issues including the prices of the Company's shares relative to NAV, together with accounting and regulatory updates. The Board also considers compliance with the investment policy, investment restrictions and compliance with borrowing covenants.

The Company's principal risks and uncertainties that could threaten its objective, strategy and performance, and how the Board manages such risks, are set out in detail on pages 24 and 25. The risk of not achieving the Company's objective, or of consistently underperforming its benchmark or competitors, may arise from any or all of inappropriate investment strategy, poor market conditions, the use of gearing, insufficient monitoring of costs and service provider issues.

In addition to monitoring our Manager's performance, capabilities, available resources and its systems and controls, the Directors also review the services provided by other principal suppliers. These include JPMorgan Chase Bank, the Custodian and JPMorgan Europe Limited, the Depositary in their duties towards the safeguarding of the Company's assets.

Review of Performance and Outlook

The principal policies that support our investment and business strategy are set out on pages 27 and 28. Shareholders can assess our financial performance from the Key Performance Indicators ('KPIs') that are set out on page 9. The Chairman's Statement on pages 5 and 6 and the Manager's Review on pages 10 and 11, both of which form part of this Strategic Report, provide a review of the Company's returns and market conditions during the financial year, the position of the Company at the year end, and the outlook for the coming year.

In light of the Company's strategy, investment processes and control environment (relating to both the oversight of its service providers and the effectiveness of the risk mitigation activities), the Board has set out its viability assessment and statement on page 26 and its reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next three years.

Stakeholder Communication and Marketing

The Company fosters good working relationships with its key stakeholders; such as the Manager, shareholders, bankers and other key service providers. The Board works closely with the Manager to ensure optimal delivery of the Company's investment proposition through all available channels and, together, we remain focused on promoting the success of the Company. The Manager offers a range of savings plans for retail investors which are a convenient and flexible way to invest in the Company, details of which can be found in the 'How to Invest' section of this report on page 84.

The Company welcomes the views of all shareholders and places great importance on communication with them. In addition to the annual and half-year reports that are available for shareholders, monthly fact sheets and additional information is included on the Company's website at ctukhighincome.co.uk.

Whenever the Manager holds meetings with the Company's larger shareholders, these are reported on to the Board. The Chairman and other Directors are available to meet shareholders if required. In addition, meetings are held with current and prospective shareholders and analysts covering the investment trust sector.

The Annual General Meeting of the Company provides a forum, both formal and informal, for all shareholders to meet and discuss issues with the Directors and Manager of the Company.

Through the Manager, we also make sure the savings plan investors are encouraged to vote at the AGM in addition to those who hold their shares on the main shareholder register. Details of the voting results on each resolution are published on the Company's website.

8|  CT UK High Income Trust PLC