FORESIGHT INHERITANCE TAX SOLUTION

Transcription

1 FORESIGHT INHERITANCE TAX SOLUTION Sustaining wealth for future generations INVESTOR GUIDE, CUSTOMER AGREEMENT & APPLICATION FORM JUNE

2 IMPORTANT INFORMATION This document constitutes a financial promotion pursuant to section 21 of the Financial Services and Markets Act 2000 (FSMA) and is issued by Foresight Group LLP (Foresight) of The Shard, 32 London Bridge Street, London SE1 9SG. Foresight is authorised and regulated by the Financial Conduct Authority (FCA), under firm reference number This document relates to the Foresight Inheritance Tax Solution (Foresight ITS). Key risks are explained on pages 20 and 21 and should be carefully considered. If you are in any doubt about the content of this document and/or any action that you should take, you should seek advice from an independent financial adviser authorised under the FSMA who specialises in advising on opportunities of this type. This promotion is only suitable for and should only be distributed to individuals who are classified as being: a) An existing client of a financial intermediary regulated by the FCA; b) A person who meets the requirements for being a professional client in accordance with COBS rule 3.5; c) A person who qualifies as a certified high net worth individual in accordance with COBS 4.7.9; d) A person who qualifies as a certified sophisticated investor in accordance with COBS 4.7.9; e) A person who qualifies as a self-certified sophisticated investor in accordance with COBS 4.7.9; or f) A person certified as a restricted investor within the meaning of COBS You should note that the Foresight ITS is a managed service and an alternative investment fund (or AIF) for the purposes of the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD). Foresight is an alternative investment fund manager (AIFM) in respect of the Foresight Inheritance Tax Solution for the purposes of AIFMD. Prospective investors are advised that Foresight is, as at the date of this document, a small authorised UK Alternative Investment Fund Manager. Prospective investors attention is drawn to the fact that Foresight is exempted from the AIFMD pursuant to Article 3(2)(a) of the AIFMD (the so-called de minimis exemption ). Therefore, prospective investors shall not benefit from any rights from the AIFMD, nor will Foresight be obliged to comply with any obligation thereunder, except to the extent provided under Article 3(2) of the AIFMD. The Foresight ITS is classified as a Retail Investment Product, and does not constitute an unregulated collective investment scheme under the FSMA. Your attention is drawn to the risk factors set out on pages 20 and 21 of this document. The value of your investment in the Foresight ITS could go down as well as up and should be considered a long term investment. Investing in unquoted shares may expose you to a significant risk of losing all the money you invest. Furthermore, unquoted securities may be subject to transfer restrictions and may be difficult to sell. You should consider carefully the suitability of an investment in small to medium-sized unquoted companies. Your application will be subject to your financial intermediary certifying that your participation in the Foresight ITS meets your objectives, that you have the expertise, experience and knowledge to understand the risks and that you are able to bear the associated risk involved in participating in the service. Investors who do not have financial advisers who will provide this confirmation may not be able to participate in the Foresight ITS. Nothing in this document should be regarded as constituting legal, taxation, investment or other advice and prospective investors are advised to consult their own professional advisers before contemplating any investment. Any decision to invest in the Foresight ITS should be made on the basis of the information contained in this guide. For further information on our terms of business, please see our Application Form and Customer Agreement. Any reference to tax laws or levels in this document is subject to change. Tax reliefs are dependent on individual circumstances. Past performance is not a guide to future performance and may not be repeated. This document does not constitute and may not be used for the purposes of an offer or invitation to any person in any jurisdiction outside the United Kingdom. This document and the information contained in it are not for publication or distribution to persons outside the United Kingdom. This promotion does not constitute a public offering in the UK. Foresight has taken all reasonable care to ensure that all the facts stated in this document are true and accurate in all material respects and that there are no other material facts or opinions which have been omitted where the omission of such would render this document misleading. All statements of opinion or belief contained in this document and all views expressed and statements made represent Foresight s own assessment and interpretation of information available to them as at the date of this document. No representation is made, or assurance given, that any statements, views or forecasts are correct or that the objectives of the Foresight ITS will be achieved. The information in this document was produced in June 2016 and may not be current. Foresight is covered by the Financial Services Compensation Scheme (FSCS). The FSCS can pay compensation to qualifying investors in the event that investors have a claim against Foresight, and Foresight is unable to meet its obligations. The maximum sum of compensation payable under the FSCS is 50,000 per investor.

3 Contents WELCOME 5 THE PROBLEM 6 INTRODUCTION TO BUSINESS 7 PROPERTY RELIEF (BPR) FINANCIAL ILLUSTRATION 9 KEY FEATURES 10 THE CHARGES 12 UNDERLYING INVESTMENTS 14 INVESTMENT EXAMPLES 15 ABOUT FORESIGHT GROUP 16 THE INVESTMENT TEAM 18 THE RISKS 20 CUSTOMER AGREEMENT 22 APPLICATION PROCEDURES 28 APPLICATION FORMS 29 DEFINITIONS 39 Take control of who benefits from the estate you ve worked so hard, all your life, to create. 3

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5 Welcome One of the UK s leading managers of tax-efficient investments in infrastructure and renewable energy. Welcome to Foresight Group, one of the UK s most experienced managers of tax-efficient investments. Established in 1984, Foresight Group has been managing investments for private investors and institutions for more than 30 years. With c. 2.7 billion of assets under management, and over 15,000 private investors, the quality of our investment management has also attracted a number of blue chip institutional investors from around the world. Many of those who invest with us are private individuals concerned about Inheritance Tax (IHT) and this is no surprise as more estates fall liable to IHT year after year. In 2015/16, HMRC receipts for IHT were the highest ever recorded, generating 4.6bn in revenues and projections are for further growth in the coming years. Here at Foresight Group, we understand that investors want simple solutions to their IHT problem that provide peace of mind. A Foresight inheritance tax solution was established in Designed to provide a simple solution to estate planning, the Foresight Inheritance Tax Solution (Foresight ITS) has already helped hundreds of investors manage their IHT liability. Over the coming pages we will discuss the IHT issue in more detail and explain how the Foresight ITS works. 5

6 The Problem Protecting your assets for your family The prospect of giving up a proportion of your hard-earned assets to HMRC on your death, which have often previously been taxed, is not something many people relish. Having paid tax throughout your life on your income, investments and savings, it can be galling to think that your beneficiaries may suffer a further IHT demand on the estate you have worked so hard to create and pass on. So planning for IHT is something that everyone should consider, and the greater your assets, the greater the need. As you can see from the table below, an increasing number of estates are affected by IHT, with HMRC receipts growing to 4.6 billion in 2015/16, the highest level since this tax was introduced. It is predicted that receipts will continue to grow as illustrated below. ACTUAL AND FORECAST IHT RECEIPTS AND NUMBER OF ESTATES LIABLE FOR IHT FROM TO ,000 7,000 NUMBER OF ESTATES WITH A LIABILITY ON DEATH 60,000 50,000 40,000 30,000 20,000 10, Number of estates liable for IHT Actual and forecast IHT receipts after 2015 Summer Budget 6,000 5,000 4,000 3,000 2,000 1,000 IHT RECEIPTS ( M) Forecast for number of estates liable for IHT at 2015 Summer Budget Forecast for IHT receipts at 2015 Summer Budget Source: HMRC receipts data and OBR forecast Everyone has a tax free allowance called the Nil Rate Band (NRB). At present this is set at 325,000 (or 650,000 for a married couple or civil partners when taken together) and is frozen until However, from April 2017 to April 2020, the family home allowance will increase this threshold gradually to 500,000 (or 1 million for a married couple or civil partners when taken together) when the estate includes a family home which is being passed to lineal descendants. Estates valued above this amount could be liable for IHT at the rate of 40% on death, and those estates that are worth more than 2 million will lose some or all of the additional family home allowance, which will be tapered down at a rate of 1 for every 2 over the 2 million threshold. Whilst there are a range of different products designed to reduce or mitigate IHT, including the use of gifts or trusts, many investors find these involve a compromise that does not meet their needs. For example, gifts and trusts can take several years to be fully effective and can mean giving up control of, and access to, your assets. We have, therefore, developed a flexible and transparent solution that is simple and swift to implement. The Foresight ITS is designed to provide Business Property Relief (BPR) on shares acquired on behalf of the investor, that allows investors to reduce their IHT liability in just two years without some of the compromises associated with other solutions. 6

7 Introduction to Business Property Relief What is Business Property Relief? Introduced in 1976, Business Property Relief (BPR) is a tax relief provided by the UK Government as an incentive to increase investment in certain types of trading businesses. What qualifies for BPR? BPR is available on businesses, on an interest in a business or a partnership, on unquoted shares and on land, buildings, plant and machinery when utilised in a qualifying trading business. It is the unquoted shares that are relevant to our solution. Our solution allows investors in qualifying BPR shares to benefit from 100% relief from IHT, provided that the shares are held for a minimum of two years and at death. Your attention is drawn to the risk factors on pages 20 and 21 under the heading Tax Reliefs. WHAT ARE THE BENEFITS OF A BPR SOLUTION? Access and Control: you maintain access and control of your investment Speed: a route to IHT exemption in just two years Efficiency: BPR qualifying assets do not impact your Nil Rate Band, maximising your IHT shelter Diversification: can complement other forms of IHT planning Power of Attorney (POA): potentially a form of effective planning for clients under POA Well-established: BPR legislation was introduced 40 years ago BPR CASE STUDY Mrs Collins has 100,000 available for investment. The shares acquired for Mrs Collins remain valued at 100,000 at the time of death*. The investment will be fully chargeable to IHT because all allowances are fully utilised by other assets within Mrs Collins estate. MRS COLLINS INVESTMENT VALUE: 100,000 CURRENT SITUATION WITH NO BPR PLANNING WITH BPR PLANNING AFTER TWO YEARS IHT due 40,000 Nil Net for estate 60, ,000 IHT Saving Nil 40,000 *The value of an investment can go up and down, and will be subject to product charges. The value of an investment being maintained or increasing is not guaranteed. 7

8 What is the Foresight Inheritance Tax Solution? Foresight ITS is a managed service investing in unquoted trading companies that should qualify for BPR. When you invest in the Foresight ITS your funds will be used to acquire shares in one or more trading companies. Each of these companies operates in a way that is focused on capital preservation and that qualifies for BPR and is likely to carry on a range of infrastructure and asset-backed trades to diversify risk. Once you have held your shares for two years, they should be deemed to be exempt from IHT, provided you continue to own the shares on the day that you die. As with any shareholding, should you wish to access your investment, you can sell some or all of it subject to liquidity. Any withdrawal would reduce the value of your investment. STRUCTURE HOW THE INVESTMENT PROCESS WORKS DAY 1 Mrs Collins and her authorised adviser complete the Application Form and Adviser Certificate and send it to The City Partnership, Foresight s Receiving Agent, with a 100,000 cheque. FORESIGHT ITS DAY 3 The City Partnership processes the Application Form on behalf of Foresight, sending an acknowledgement of receipt to Mrs Collins and her adviser. UNQUOTED TRADING COMPANIES DAY 17 T0 31 Once the money has cleared, the Application Form accepted and the 14-day cancellation period has expired, Foresight invests Mrs Collins 100,000 less any upfront adviser charges facilitated and Foresight initial charges (i.e. Net Investment Amount) into shares in one or more BPR qualifying companies. Foresight sends a welcome pack to Mrs Collins including a Certificate of Investment indicating the investment date, the Net Investment Amount and the date when the investment should become IHT exempt, along with a letter and an initial valuation statement. Foresight transfers any upfront adviser charges to the nominated bank account and sends a copy of all correspondence to Mrs Collins financial intermediary. Foresight subsequently sends investment valuation statements twice a year. Trade 1 Trade 2 Trade 3 Trade 4 2 YEARS On the second anniversary of the date of investment in the BPR qualifying companies, Mrs Collins investment should become an exempt asset for IHT purposes provided Mrs Collins continues to hold the shares at the date of her death. 8

9 Financial Illustration In the illustration below, Investor A is assumed to have invested 100,000 (after costs) in the FTSE All Share (FTSE) which does not qualify for BPR and which for the purposes of this illustration delivers an average annual return of 7% with returns reinvested while Investor B makes an investment of the same amount into the Foresight ITS which, again for the purposes of this illustration, meets its target return of 3.5% on the net amount invested. This return is also reinvested and the investment qualifies for BPR. After two years Investor B s investment in Foresight ITS qualifies for exemption from IHT, whilst Investor A s investment in the FTSE remains liable for IHT. Hence, if death were to occur six years after the original investment of 100,000, although the beneficiaries of Investor A would have seen the investment in the FTSE grow to 150,073, they would receive just 90,044 after IHT at 40% is applied (assuming no other reliefs are available). Whereas for the beneficiaries of Investor B, the investment in the Foresight ITS would have grown to 121,000, which would be due in full since the investment qualified for BPR after 2 years and, as such, is exempted of IHT liability. The beneficiaries of Investor B in this example, therefore, receive 30,956 more than the beneficiaries of Investor A despite the assumed lower return. Note: The returns shown above and below are set out for illustrative purposes only to reflect the effect of BPR qualification and no forecast or projection is implied or should be inferred. The value of an investment can go up as well as down. 160,000 INVESTMENT AFTER 6 YEARS BENEFICIARIES ENTITLEMENT 140, , ,073 29, , ,000 30, ,000 80,000 60,000 90,044 40,000 20,000 0 Invested in FTSE Investor A Invested in the Foresight ITS Investor B 6 yr growth of FTSE 6 yr growth of the Foresight ITS Beneficiaries entitlement after IHT Beneficiaries entitlement after IHT Assumptions 1 The Foresight ITS investment assumes a return of 3.5% per annum; the FTSE All Share investment assumes average 7% return per annum. 2 No other reliefs are available for investors, such as the NRB; the FTSE All Share and the Foresight ITS investment assume that the NRB has already been fully utilised. The FTSE All Share investment is, therefore, subject to IHT at 40%. Investment in the Foresight ITS is not subject to IHT once held for two years and assuming it is held on death. 3 Returns are shown net of all costs of the investment. For the Foresight ITS, costs would include the initial charge of 2.5% and annual costs and expenses, and it is assumed that there are no adviser charges. For the FTSE All Share investment it is assumed that there are no charges. 9

10 Key Features A solution that is fast, flexible and above all which leaves you in control MINIMUM INVESTMENT 25,000 MAXIMUM INVESTMENT There is no maximum. ADDITIONAL CONTRIBUTIONS 10,000 or more at any time, (each top up will take two years to become IHT exempt). TARGET INVESTMENT SECTORS Asset-backed opportunities including infrastructure assets such as solar power plants, PFI, smart meters and other sectors that meet the desired risk/reward profile, including asset-backed investments. TARGET INVESTOR RETURN Investor Priority Return of 3.5%* per annum (calculated on the Net Investment Amount). ACCUMULATION OR DISTRIBUTIONS You may make regular withdrawals after the first anniversary of your investment on a monthly, quarterly, six-monthly or annual basis. Alternatively you can maximise the tax shelter by leaving returns invested. LIQUIDITY Foresight will endeavour to effect withdrawals within 15 working days from receipt of written instruction. In certain circumstances withdrawals may take considerably longer than this see risk factors on pages 20 and 21 for further details. TAXATION Withdrawals will generally be made through a disposal of your holding in shares. Foresight will endeavour to effect withdrawals in as tax efficient manner as is possible at the time, typically with a capital gains tax treatment, but this cannot be guaranteed (in particular for full withdrawals). Foresight may from time to time effect withdrawals by way of dividends (taxable to income tax). The IHT shelter will be lost and the value of the investment will be eroded in respect of the amount withdrawn. OPTIONS FOR SETTLING PROBATE If instructed to do so Foresight can sell down the investment and pay the proceeds directly to HMRC to part/fully cover IHT liability. VALUATION METHODOLOGY Foresight will value the investments, including capital and income, in your Portfolio on a basis consistent with the valuation principles issued by the British Private Equity and Venture Capital Association. These principles may vary from time to time, but normally will be based on discounted cash-flows. The companies in which investments are made are audited annually. REPORTING You will receive a valuation and report on your investment every six months including, every year, a set of the annual accounts for the company(ies) in which you are invested. *3.5% target return is calculated on net amount invested into underlying companies (i.e. after all initial charges have been deducted) 10

11 The hardest thing in the world to understand is Income Tax. The second hardest thing is Inheritance Tax. Albert Einstein 11

12 The Charges A charging structure based on transparency and fairness PRODUCT CHARGES Initial Charges 1 2.5% Annual Administration Expenses 2 up to 0.7% Annual Management Charges 3 1.0% Arrangement Fees % ADVISER CHARGES Initial Charges 5 Ongoing Charges 6 Variable Variable PRODUCT INITIAL CHARGES 1. Initial Charge: The Foresight ITS is subject to an initial charge of 2.5% in favour of Foresight which will be deducted from the amount subscribed. This charge will not be applied to any amount deducted to facilitate payment of adviser charges. PRODUCT ONGOING CHARGES 2. Annual Administration Expenses: These costs relate to the normal running and administration costs of the companies that investors in Foresight ITS invest into directly and relate to such things as Foresight s company secretarial, audit and directors fees and other regulatory costs incurred. This does not include the annual management charges or costs relating to the entities in which such companies invest and the investment costs of the underlying investments. Foresight will ensure that these expenses are capped at 0.7% of the value of the investments in the Foresight ITS and the Foresight Accelerated ITS. For further information please see clauses 6.5 to 6.7 of the Customer Agreement on page Annual Management Charge: Foresight s annual management charge per investor is 1.0% per annum of the Net Investment Amount (i.e. net of any initial adviser charges and Foresight initial charges for that Investor). Foresight s annual management charges run from the date the shares are acquired for the relevant investor and are payable quarterly in advance in respect of the relevant year, but subject to a refund if investors have not received a cumulative priority return of 3.5% in each year. In cases where annual returns are not sufficient to meet these priorities, both the investor cumulative priority return and Foresight s annual management charge will be accrued and Foresight will only be paid when performance allows in future years. For example, if the return delivered to an investor in year one was 2%, Foresight would not be entitled to any annual management charges for that year and would refund any annual fees taken. The investor would then have to receive a return of 5% in year two prior to Foresight being entitled to any annual management fee for year two (but could then also take accrued management fees for year one if performance allowed). By annual returns we mean the returns credited to the Portfolio of each investor in the Foresight ITS, calculated by Foresight on the basis of the Net Investment Amount. Annual returns are calculated after the deduction of the annual administration expenses (capped at 0.7% per annum) but before deduction of management charges. In the event of a withdrawal by the investor, the Net Investment Amount on which the annual management charges are based will be reduced by the original cost attaching to the investment withdrawn. 4. Arrangement Fees: Foresight and its Affiliates will charge transaction arrangement fees in respect of underlying companies and trades funded through the Foresight ITS and the Foresight Accelerated ITS. Foresight will ensure that such fees will range between 0.5% to 1.5% of the Foresight ITS and the Foresight Accelerated ITS funds value per annum. Applicable VAT will be charged as appropriate. TRANSPARENCY All of the fees received by Foresight are detailed above. There are no other dealing, management, administration or hidden fees. ADVISER CHARGES: 5. Initial Adviser Charges: An investor can specify on the Application Form the amount of any up front charge agreed with a financial intermediary in connection with the Foresight ITS. Foresight will deduct such agreed up front charge from the amount subscribed and facilitate payment to the financial intermediary. 6. Ongoing Adviser Charges: An investor can also specify in the Application Form the amount of any ongoing charges he has agreed with his financial intermediary in connection with the Foresight ITS. Foresight will effect a withdrawal from the investor s investment and facilitate payment to the financial intermediary. The withdrawal will generally be effected through a disposal of part of the investor s holding in shares. See further page 26 in relation to taxation consequences and other implications of withdrawals. 12

13 Infrastructure businesses and asset-backed investments present an ideal risk/return profile where reliable yield and asset cover are important. We are pleased that we are now able to offer these investment opportunities, which we have been accessing for a number of years, to investors wishing to protect their wealth from inheritance tax Jamie Richards Head of Infrastructure, Foresight Group 13

14 Underlying Investments Infrastructure and asset-backed investments The Foresight ITS invests into infrastructure businesses and other asset-backed investments which have a number of attractive characteristics for investors. We seek the following characteristics from every investment that we make: Capital preservation Low volatility Low correlation to equities Our aim is to invest your money into shares in one or more trading companies which qualify for BPR and where risks can be minimised as far as possible. Our strategy is to select investments which offer a combination of stable and predictable cashflows, low correlation to economic, business and market cycles and relatively low default rates. We place an emphasis on these areas to minimise the risk to capital and optimise capital preservation. TYPICAL FEATURES OF INFRASTRUCTURE AND ASSET-BACKED INVESTMENTS CHARACTERISTICS INFRASTRUCTURE ASSET-BACKED INVESTMENTS Capital preservation Large counterparties, blue chip/government Diversified portfolio and security over underlying assets and loans Low volatility Contracted revenue streams Low correlation to equity markets Returns are not affected by stock price volatility CO-INVESTMENT Foresight intends to co-invest funds from the Foresight ITS with the Foresight Accelerated ITS. Foresight may also invest funds under the Foresight ITS with other funds managed by the Foresight Group and/or introduce other third party co-investors to opportunities. The decision as to allocation and co-investment will be at the sole discretion of Foresight. Why Foresight for infrastructure and asset-backed investments At Foresight we know the priority for our investors is to provide a shelter from IHT by investing with a low risk profile and where capital preservation is key while providing a modest return. Foresight Group has an experienced and dedicated infrastructure investment team of 36 professionals managing a 1.1 billion portfolio of infrastructure assets. Foresight Group s infrastructure portfolio at the time of writing includes 70 solar plants generating in excess of 700MW of electricity in the UK, US and southern Europe, 19 waste-to-energy power plants and recycling centres in the UK, 42,000 smart meters in commercial and industrial sites across the UK, and investments in PFI projects, including 13 schools and 4 hospitals. At Foresight Group, we source infrastructure and asset-backed investment opportunities through our network of contacts, built over many years from working in the sector. 14

15 Investment Examples Detailed below are examples of underlying infrastructure investments made by Foresight over the last four years. These show the types of underlying investments to which investors in the Foresight ITS are likely to have access. Ground-based Solar Infrastructure Foresight is one of the UK s most experienced investors in solar infrastructure and the second largest owner of solar assets in the UK with a UK portfolio of more than 50 operational solar power plants and a generating capacity of over 600MW, enough to power the households in a city the size of Leicester. The Foresight ITS is already invested in more than 20 plants ranging in capacity from 1.9MW to over 16MW and benefiting from the enhanced revenues delivered by the Renewable Obligation or Feed-in Tariff subsidy schemes where plants accredited under either scheme receive 20 years of index-linked subsidy income alongside revenues from the power they generate. Ford Farm Solar Plant Despite the withdrawal of ROCs for new solar developments, the subsidies for existing projects are protected and solar still represents a low volatility sector delivering attractive returns that are uncorrelated to the macro economy. The Foresight ITS will continue to make investments in UK solar infrastructure where appropriate since the asset class meets the low volatility and capital preservation objectives so important to our investors. CAPITAL PRESERVATION: attractive infrastructure asset LOW VOLATILITY: predictable revenue streams supported by index linked 20 year government subsidy LOW CORRELATION: returns not influenced by equity markets Secondary Private Finance Initiative ( PFI ) Lochgilphead Hospital Foresight has been active in the secondary PFI market since 2012, when it acquired stakes in thirteen school PFI projects around the UK as well as four operational PFI healthcare projects in which the Foresight ITS is invested - Lochgilphead Hospital, Bishop Auckland Hospital, Wharfedale Hospital and Stobhill Local Forensic Psychiatry Unit. These four projects exhibit strong yield and performance track records and have long-term concessions that will last on average for more than 20 years. The secondary PFI market remains an attractive sector for the Foresight ITS, since PFI projects benefit from low credit risk due to long-term contracts with public sector counterparties. CAPITAL PRESERVATION: fundamental infrastructure assets LOW VOLATILITY: predictable contracted revenue streams, many with government guarantees LOW CORRELATION: returns not influenced by equity markets Energy Efficiency Cemex UK Foresight has pioneered the provision of large scale energy efficiency and energy cost reduction improvements in the leisure and industrial sectors. In the leisure sector this has involved more than 30 voltage optimisation installations alongside one HVA swimming pool system, while in the industrial sector it has seen the installation of gas pipeline and connection infrastructure to replace diesel oil at ten sites. Returns are derived from the financial value of the energy savings made and deliver an amortising cash flow profile with no exit required at the end of the investment. CAPITAL PRESERVATION: energy infrastructure assets LOW VOLATILITY: revenues linked to energy savings, amortising cashflows LOW CORRELATION: returns not influenced by equity markets Smart Metering Smart Meter Foresight has developed a unique and bespoke financing arrangement with Utility Funding Limited, investing in the roll out of smart meters initially in the commercial and industrial sector for the past three years, financing a portfolio of over 42,000 installed smart meters with more than 30 of the top energy suppliers in the UK. The strong counterparties (energy suppliers) and the regulated nature of the wider market offers a level of security over future cash flows. In addition, the level of technology utilised in the current generation of smart meters is well tested and proven such that asset lives are expected to be well in excess of 10 years. The scale of the meter installation programme with the roll out to the residential sector, where the UK Government is targeting the installation of 53 million smart meters in more than 30 million premises by 2020, presents an opportunity for the Foresight ITS to invest significant capital on a staged basis. CAPITAL PRESERVATION: fundamental infrastructure assets LOW VOLATILITY: predictable contracted revenue streams, plus Government mandated roll-out LOW CORRELATION: returns not influenced by equity markets 15

16 About Foresight Group Foresight Group was established in 1984 by co-founders Bernard Fairman and Peter English, who had worked together at 3i. Bernard, as Chairman continues to run the business today, and Peter remains an active member of the senior management team. Foresight Group manages money for more than 15,000 private investors and some of the world s leading financial institutions, Government organisations, pension funds and insurance companies. C. 2.7 BILLION OF ASSETS under management as at 30/06/ STAFF 63 INVESTMENT PROFESSIONALS with YEARS OVER 828 of investment experience INSTITUTIONAL & RETAIL MONEY TOTAL ASSETS UNDER MANAGEMENT: 2.7 BILLION RETAIL: 896 MILLION INSTITUTIONAL: 1.8 BILLION Source: Foresight as at 30/06/2017 SCHRODERS 35M LEGAL & GENERAL 32M RATHBONE 24M LONDON GREEN FUND / EUROPEAN INVESTMENT BANK 28M BLACKROCK 59M NEWTON 42M GREEN INVESTMENT BANK 164M FORESIGHT SOLAR FUND Total: 694M including... INSTITUTIONAL 1,797 BILLION PRIVATE SINGLE MANAGED FUND 250M CEFC 60M 2 REGIONAL PE FUNDS 80M RETAIL 896 MILLION EIS 308M OTHER 521M VCT 308M BPR 193M OTHER 87M 16

17 HEADQUARTERED IN LONDON with offices in NOTTINGHAM MANCHESTER GUERNSEY ROME SAN FRANCISCO SYDNEY Currently manages money for Blackrock, Newton, European Investment Bank & Clean Energy Finance Corporation AMONGST MANY OTHERS Assets under management have more than DOUBLED in the LAST 3 YEARS AWARDS RECENT AWARDS Tax Efficiency Awards Best IHT Portfolio Service (AITS) New Energy and Cleantech Awards Financier of the Year & Company of the Year Financier of the Year Platts Global Energy Awards Financial Deal of the Year Foresight has institutional calibre operational processes and procedures, which have helped it to win prestigious mandates including Greater Manchester Pension Fund. Allenbridge (excerpt from Manager Section of Foresight Solar & Infrastructure VCT report) 17

18 The Investment Team Senior Team Bernard Fairman Chairman of Foresight Group Bernard has over 35 years investment experience. With a degree in economics from Nottingham University, he joined Panmure Gordon as an oil investment analyst, then moved to Edward Bates, a specialist City investment bank. He then worked with several small electronics companies before joining the newly formed 3i Ventures in He founded Foresight Group, formerly VCF Partners, with Peter English in David Hughes Chief Investment Officer David is responsible for Foresight s overall investment activities and portfolio management. David has 40 years experience of unquoted investment management, initially with 3i and subsequently establishing fund management operations for Framlington Investment Management Ltd, Baltic plc and Bank Austria AG, London. He has been involved in VCT management since Gary Fraser Group Finance Director Gary is a Chartered Accountant and Chartered Fellow of the Securities Institute. He has over 20 years experience in finance and investment, and worked for Ernst & Young and ISIS Asset Management before joining Foresight in Jamie Richards Partner Jamie is a chartered accountant and has 22 years experience in fund management, banking and corporate recovery. He is one of four executive committee members that manage Foresight Group. Since inception in 2007, he has had overall responsibility for Foresight s solar business in the UK, Italy, Spain and the US and his main activities include responsibility for origination and structuring of Foresight s infrastructure funds. Jamie has overseen more than 60 solar projects representing Foresight s c. 1 billion solar portfolio. Since joining Foresight in 2000, he has led a number of venture, cleantech and renewable infrastructure investments. Prior to joining Foresight, he worked at PwC, Citibank and Macquarie, both in London and Sydney. 18

19 The Investment Team Investment Managers Richard Thompson Director Richard is a CFA charterholder with 10 years experience in the infrastructure sector, formerly working in equity investment origination at Carillion both in London and Toronto. At Carillion, Richard was responsible for structuring more than 800m of bank and bond project financing across a wide range of infrastructure projects. He joined Foresight in 2012 as a Director in the Infrastructure team, he has responsibility for the group s infrastructure investments including secondary market PFI, PPP, reserve power and energy storage projects. Richard has also been heavily involved in a number of Foresight s solar investments and the IPO of Foresight Solar Fund Limited. Richard holds an Economics degree from the University of Liverpool. Matt Smith Director Matt joined Foresight Group in 2010 from Rothschild where he spent 6 years advising on a range of equity capital market, private equity and corporate M&A transactions. Matt graduated from Oxford University in Biological Sciences and Physiology. During his time there, he rowed in the Oxford Cambridge Boat Race four times. Matt currently works with a number of portfolio companies including Mercia Power Response and has led Foresight s innovative energy efficiency transactions with David Lloyd Leisure and Cemex. Ricardo Pineiro Director, Head of UK Solar Ricardo is primarily focused on leading new infrastructure transactions across UK and Europe. He joined Foresight from Espirito Santo Investment, after three years in the project finance division with a special focus on transport, energy, oil and gas. He has strong experience of structuring, financial modelling and due diligence analysis of transactions as well as credit and debt facilities management. Ricardo came to the UK from Portugal in January 2007 to join Espirito Santo Investment as part of a training program under the Portuguese Trade & Tourism Office. Prior to this he worked as a business analyst in the corporate finance division of a Portuguese investment bank in Lisbon. Tom Thorp Director Tom joined Foresight in 2008 from KPMG Advisory where he qualified as a Chartered Accountant and worked on a large number of due diligence assignments for large private equity houses and corporates both in the UK and Germany. Since joining Foresight, Tom worked initially within the waste to energy team dealing with all types of renewable energy projects such as food waste anaerobic digestion as well as waste wood combustion and gasification before joining the private equity team in 2013 to work on traditional buy outs and growth capital deals. Tom is responsible for our existing smart metering investments highlighted in this document. He has a Bachelor of Commerce degree from the University of Edinburgh and is a Chartered Accountant. 19

20 The Risks 20 This Foresight ITS investment might not be suitable for all investors and we recommend anyone considering making an investment in the Foresight ITS to seek independent tax and financial advice before they commit. In particular, an investment in the Foresight ITS should be held for the long term, since investments in BPR qualifying companies must be held for at least two years (and held at the date of death) in order to benefit from IHT relief. If you sell or withdraw any of your holding after two years, you will lose the IHT relief on the amount withdrawn and retain IHT exemption only on your remaining investment. Foresight is not able to provide advice about whether this investment opportunity is suitable for you. It is important that you read and fully understand the risks involved with an investment of this nature to decide whether it s right for you. The value of an investment may go down and you may not get back the full amount invested. There is no guarantee that any targeted return will be achieved. Tax regulations are subject to change. PERFORMANCE Foresight cannot guarantee any targeted level of returns, since the level of returns that will be generated by your Portfolio will depend on the performance of the underlying assets. There is no guarantee that the assets will perform or that external factors will not hamper performance. The value of an investment in the Foresight ITS may fall as well as rise and investors may not get back the full amount invested. In the event that the value of an underlying asset of a company in which the Foresight ITS invests is adversely affected, it may not be possible for that company to recover all of the money that has been utilised and investors may therefore lose some or all of their investment. Investing in unquoted shares may expose you to a significant risk of losing all the money you invest. Although the value of your investment may fall, the annual charges are fixed and may therefore represent a larger percentage cost than stated at outset. The past performance of investments made by Foresight Group is not a guide to the future performance of the Foresight ITS. Foresight has been appointed as the investment manager of the Foresight ITS and is dependent on certain key individuals and on their business and financial skills. Therefore, the success of the Foresight ITS will depend upon the ability of Foresight to identify, source, select, complete, and monitor appropriate investments. QUALIFYING COMPANIES AND UNDERLYING INVESTMENTS The Foresight ITS targets investments in companies which are reasonably believed to qualify for BPR, however, Foresight cannot guarantee that any investment will remain a qualifying investment at all times. In the event that a company ceases to be a qualifying investment, BPR would be lost. Whilst the Foresight ITS seeks to invest in companies which are asset-backed, including infrastructure assets such as solar power plants and smart meters, investment in unquoted companies by its nature involves a higher degree of risk than investment in companies on the Official List. In certain circumstances, a company in which the Foresight ITS invests, directly or indirectly, might take out insurance to mitigate particular risks that they are exposed to but in the unlikely event that the insurer becomes bankrupt or for any other reason does not pay a claim, investors could lose some or all of their investment. LIQUIDITY Investments in unquoted companies, by their nature, have limited liquidity compared to companies that are listed, for example, on the London Stock Exchange. As a result there may not be a market for your investments if you decide to terminate the Customer Agreement or make a withdrawal. Although investments in the Foresight ITS are intended to be redeemable, there is no guarantee that withdrawals will be paid when requested or that investment monies will be returned within 15 business days after receipt of the written request. Factors such as difficulties in realising underlying investments; a higher than anticipated volume of requests for withdrawal; and changes in legislation could all result in the Foresight ITS having insufficient liquidity to satisfy withdrawal requests and the process for returning monies could be much longer than anticipated. Any withdrawal, whether regular, one off or to facilitate adviser charges, will reduce the value of your Portfolio, reducing the IHT shelter and eroding future returns. TAX RELIEFS To obtain the tax reliefs set out in this Investor Guide, the personal representatives of an investor s estate will need to complete and file the necessary probate returns for assessment by HMRC and no guarantee is made that any such assessment will result in relief being granted. Statements in this Investor Guide regarding taxation and tax reliefs are based on our interpretation of current UK legislation. This interpretation may not be correct. Tax legislation, rates of tax, tax benefits, reliefs and allowances are based on current legislation and HMRC practice which may change over time and are not guaranteed. A change in legislation, in addition to reducing the tax benefits provided by the Foresight ITS, may also make the underlying investments difficult to sell, particularly in the short-term. Tax treatment also depends on individual circumstances and you should seek input from your adviser about whether the Foresight ITS is suitable for your circumstances. To qualify for BPR the investments will need to be held for at least two years and on death, and any withdrawal from a Portfolio, whether as a drawdown to the investor or payment of charges to the investor s adviser, will not qualify for BPR. It may take longer than one month to invest your funds. The two-year holding period required for the investment potentially to qualify for BPR starts when qualifying shares are purchased. Typically shares will be acquired under the Foresight ITS within one month of applications being accepted, however, this cannot be guaranteed. Any delay in acquiring shares will, therefore, delay the potential IHT relief.

21 The Risks Foresight will assume that all investments are new investments requiring a full two year holding period for BPR and will report to you on this basis. If you are transferring an existing BPR investment into the Foresight ITS, it will be your responsibility to assess your holding period for BPR and whether any transfer prejudices any prior holding period (and no responsibility is taken by Foresight in this regard). DIVERSIFICATION Foresight will aim to invest your money into BPR qualifying shares. These shares may only be in one or two companies whose activity is likely to be predominantly focused on the infrastructure sector and asset-backed investments. As a result, diversification is limited and you should consider whether this works in the context of your overall portfolio, seeking advice from your financial adviser as necessary. CONFLICTS OF INTEREST Companies in which the Foresight ITS invests might deal with funds managed by the Foresight Group or entities in which the Foresight Group and funds managed by the Foresight Group are interested, including as shareholders or lenders. All decisions made by Foresight for investors in the Foresight ITS will comply with the objectives of the Foresight ITS. However, the outcome of those decisions may, on occasion, be more beneficial to one or more affected persons than others. Foresight has protocols in place to manage such conflicts whenever possible. Foresight Group may also receive arrangement fees and monitoring and similar fees in relation to such entities. 21

22 Customer Agreement Please take independent advice on this Customer Agreement 1. Legal Status This Customer Agreement constitutes the contract between You and Us appointing Us to constitute and manage Your Portfolio in accordance with the Investor Guide. By signing the Application Form You agree and/or confirm that: 1.1 You have received, read and understood the Investor Guide and this Customer Agreement; 1.2 Your investment will be managed and operated in accordance with and on the terms and conditions of the Customer Agreement; 1.3 You have not relied on any statement, representation or warranty made or given by the Foresight Group, other than those expressly set out in the Customer Agreement; 1.4 You have sought independent advice in respect of Your investment in the Foresight ITS; 1.5 all information that You have provided to Us (including the information provided in Your Application Form) is true, accurate and complete in all material respects and You have not omitted any information which may be material to the services to be provided to You and any changes to information You have provided shall be notified to Us in writing as soon as reasonably practicable; and 1.6 where You comprise two persons as joint investors We shall be entitled to act on the instructions and directions of any one of such persons. 2. Regulatory Status 2.1 Foresight is authorised and regulated in the United Kingdom by the Financial Conduct Authority (FCA number: ) for the provision of investment management and advisory services. 2.2 We shall act as manager of the Foresight ITS and will admit investors and manage the investment portfolio on the terms of this Customer Agreement. The Foresight ITS shall be Foresight s client for the purposes of the FCA Rules and Foresight will not owe any obligations under the rules of the FCA to You, save for any applicable requirements in COBS We will comply with FCA rules on best execution, namely COBS 11.2, as more particularly detailed in the Schedule to this Customer Agreement. You should note that the provision by counterparties of guarantees of minimum contractual levels of return may be more important than price in obtaining the best possible execution result in the context of achieving the objectives of the Foresight ITS. 2.4 We will always comply with the Applicable Rules in relation to the Foresight ITS. 2.5 The Foresight ITS is only suitable for persons who are likely to be subject to IHT and is not addressed to, or being sent to, any non-uk residents. 2.6 Foresight is covered by the Financial Services Compensation Scheme. As a retail client, You may be eligible to claim compensation from the Financial Services Compensation Scheme in certain circumstances. Most types of investment business are covered in full for the first 50,000 of any eligible claim although certain investors may not be eligible to claim under this scheme. For further information please contact Us or the Financial Services Compensation Scheme directly at 3. Commencement Date and Right of Cancellation 3.1 This Customer Agreement will take effect on the date We accept Your duly completed and signed Application Form. 3.2 All Our obligations under this Customer Agreement are subject to Our first being satisfied with any compliance procedures required of Us in accordance with all Money Laundering Regulations. The compliance procedures include requiring proof of Your identity and of Your address, or that of any person with legal control over the investment. You authorise Foresight or its Affiliates to undertake any electronic searches necessary for the purposes of verifying Your identity and address and to check the details You supply against Your particulars on any database (public or otherwise). 3.3 We may pass on any information supplied by or on behalf of You as We consider necessary to comply with any legal or regulatory obligation to which We or any Affiliate are subject. Foresight may also use Your details in the future to assist other companies for verification purposes. A record of this search will be retained. If Your identity cannot be verified, We may ask You to provide, among other things, a recent, original bank statement and an original HM Revenue & Customs Tax Notification, or a copy of Your passport certified by a bank, solicitor or accountant or a Client Verification Certificate from Your financial adviser. 3.4 Following acceptance of an Application Form, the Receiving Agent will write to You (or your adviser if that is your elected preference) confirming acceptance and enclosing a form of cancellation notice. You may exercise a right to cancel the Customer Agreement by notification to Us within 14 days of the date of the cancellation notice. This should be done by a letter sent to Us at the address given in clause 20.6 of this Customer Agreement. 3.5 If You exercise Your cancellation rights, We shall arrange for the refund of any monies paid by You, less any charges We have already incurred for any services undertaken pursuant to the terms of this Customer Agreement or paid out in respect of agreed adviser charges and/or if relevant transfer into Your own name any shares acquired for You. 3.6 We will endeavour to arrange the return of any monies pursuant to clause 3.5 of this Customer Agreement as soon as possible (but in any event not more than 30 days following cancellation). You will not be entitled to any interest on such monies. The Receiving Agent is obliged to hold Your subscription monies until the Receiving Agent has satisfactorily completed the requisite money laundering checks. 3.7 The right to cancel set out in clause 3.4 of this Customer Agreement is without prejudice to the right under clause 16.1 of this Customer Agreement to terminate this Customer Agreement, which is a separate right. 3.8 The right to cancel under the FCA Rules does not give You the right to cancel, terminate or reverse any particular investment transaction executed for Your account before such cancellation takes effect. 3.9 Unless you expressly instruct us otherwise (in accordance with clause 3.10), We do not intend to acquire shares for You under the Foresight ITS until after the expiry of the 14 day cancellation period referred to in clause 3.4 of this Customer Agreement. You should note, however, the potentially adverse consequences of cancellation if You cancel after shares in investee companies have been acquired for You there will be no established market for those shares and, if You wished to sell them, You would be responsible for trying to do so, including finding a buyer; the shares may not be redeemable by the issuing company; and You will be responsible for recovering any facilitation fee that has been paid to Your financial intermediary on Your behalf You may instruct us to acquire shares for your portfolio as soon as possible following acceptance of your Application Form, rather than waiting for the passing of the 14 day cancellation period. By doing this, you will lose your right to cancel the Customer Agreement and will only be able to terminate the agreement in accordance with the provisions set out in clause 16 of this Customer Agreement, which will result in You incurring certain fees and charges. If you wish to instruct Us to acquire shares for your portfolio as soon as possible following acceptance of your Application Form, you may do this by ticking the box that appears under the section headed Your right to cancel in the Application Form. 22

23 Customer Agreement 4. Investment Management 4.1 The Foresight ITS is a managed service and an Alternative Investment Fund. By entering into this Customer Agreement, You grant to Us the right on Your behalf and on a discretionary basis to select and manage investments in accordance with the objectives and principles of the Foresight ITS, as set out in the Investor Guide. We will buy appropriate investments to build Your Portfolio and when You wish to withdraw funds from Your Portfolio, sell down such holdings in Your Portfolio as We deem appropriate. Generally We shall act as We think appropriate in relation to the management of the Portfolio, but subject always to the provisions of this Customer Agreement and the Applicable Rules. 4.2 By entering into this Customer Agreement, You acknowledge that the Foresight Group has not provided You with advice about the Foresight ITS. You further acknowledge that the Foresight ITS is not a collective investment scheme nor is it regulated and accordingly does not provide for protections typical of such schemes or regulated products. 4.3 We will acquire for Your Portfolio, investments which We reasonably believe to be Qualifying Investments at the time of acquisition (but no commitment is given that any such investment will remain a Qualifying Investment at all times thereafter). There shall be no restriction on the amount invested in any one investment, or on the proportion of Your Portfolio in any one investment, or any particular type of investment unless specified in the Investor Guide and Applicable Rules. 4.4 It is likely that the trading activities of the entities in which Your Portfolio invests, directly or indirectly, will include dealings with companies and other entities in which Foresight and its Affiliates or funds advised by Foresight and its Affiliates have an interest. Such interests may include equity investments and/or debt investments. Such dealings may include the provision of credit facilities on preferred or subordinated terms. Accordingly Foresight and its Affiliates may be entitled to gains, profits or fees from or in relation to such companies and entities. Additionally the costs and expenses of such companies and entities (which may include payments to Foresight or Affiliates) are not included in the expenses cap referred to in clause 6.7 of this Customer Agreement. The conduct of Your Portfolio will always be in accordance with the objectives and principles set out in the Investor Guide. 4.5 Any sale of investments by Us, or withdrawals by way of dividends, on Your behalf may trigger tax consequences about which You should speak to Your professional financial and/or tax adviser. A sale of Qualifying Investments will mean You lose the benefit of BPR in relation to those Qualifying Investments. We are not responsible for the taxation consequences of any transaction. Save for BPR We are not required to take into account tax issues for You in the management of the Portfolio. 4.6 We will not be responsible for any disclosures or notifications from time to time required of You by legislation or regulatory bodies such as the Panel on Takeovers and Mergers. 4.7 We shall not, except as expressly provided in this Customer Agreement or unless otherwise authorised, have any authority to act on behalf of, or in respect of, You or to act as Your agent. 5. Financial Advice 5.1 Foresight and its Affiliates have provided no financial, legal, tax or investment advice in relation to the suitability of the Foresight ITS for You. It is Your responsibility (on the advice of Your professional financial adviser if appropriate) to keep Your financial circumstances, objectives and risk profile under review, and to assess whether the Foresight ITS and other investments selected by (or on behalf of) You remain suitable for Your needs. We are not liable for any losses You suffer or incur as a result of Your investment in the Foresight ITS (whether or not You have received advice from a professional financial adviser) and We cannot and do not make any representation that such investment is suitable or appropriate for Your specific needs and requirements. 5.2 We will provide You with information on investments held within Your Portfolio from time to time. Any information on investments or markets such as market trends, investment analysis or commentary on the performance of selected investments or companies is for information purposes only and should not be viewed as a personal recommendation. 5.3 We may, subject to Applicable Rules and unless You notify Us in writing, accept instructions and deal with any agent or other adviser notified to Us in writing rather than dealing with You directly and We may share with such person, details of Your investments with Us. 5.4 Where Your Application Form has been submitted through a financial intermediary or other professional agent, then You warrant and represent that such person is acting as Your agent. 6. Fees and Expenses 6.1 Fees and expenses are summarised in the Investor Guide and are described in more detail in this clause 6 of this Customer Agreement. 6.2 Foresight will be entitled to an initial charge of 2.5% of the monies subscribed by You in the Foresight ITS. This initial charge will be deducted from the monies subscribed before the balance, net of initial adviser charges, is invested on Your behalf. This charge will not be applied to any amount deducted to facilitate payment of initial adviser charges. 6.3 Foresight may make, or procure the making of, facilitation payments in respect of charges You have agreed with Your financial intermediary on Your behalf as detailed in the Investor Guide. You confirm that any ongoing agreed charges payable to Your financial intermediary are and will be for ongoing services to You in relation to the Foresight ITS. You have the right to cancel the facilitation of ongoing charges at any time by notice in writing to Us. You may also request that facilitation of ongoing charges be paid to a new financial intermediary who is advising You in relation to the Foresight ITS in place of the previous financial intermediary. Any such request must be by at least 30 days notice in writing to Us. No facilitation of ongoing charges will be made unless these are exceeded by the value of Your Portfolio. We may decline to make or procure the making of, facilitation payments, or alter the structure of such facilitation payments for legal, tax or regulatory reasons. All facilitation payments will be made in accordance with the Foresight Group terms of business for financial intermediaries from time to time. 6.4 Foresight will be entitled to an annual management charge of an amount equal to 1.0% per annum of the Net Investment Amount, calculated as follows and shall be payable as provided in clause of this Customer Agreement: Foresight shall, within 1 month of the end of each financial year of the Foresight ITS calculate the annual return on Your Portfolio for the period ( Calculation Period ) from the date of Your investment in the Foresight ITS to the last day of that financial year. Annual return shall mean income returns (excluding capital growth) on the funds invested by You in Your Portfolio (net of the initial charge of 2.5%, any upfront adviser charges that are facilitated and any withdrawals by You) and shall be calculated on a cumulative basis (without compounding) after deduction of the costs and expenses of the Foresight ITS and before deduction of Foresight s annual management charges If at the end of the relevant Calculation Period, the annual return on Your Portfolio is at least 4.5% per annum, then Foresight shall be entitled to its annual management charge for the relevant financial year (and, to the extent not previously paid, any accrued annual management charges resulting from clauses and of this Customer Agreement for any previous financial year, but subject to the annual return on Your Portfolio for the relevant Calculation Period not being reduced to less than 3.5% per annum); 23

24 Customer Agreement If at the end of the relevant Calculation Period, the annual return on Your Portfolio is greater than 3.5% per annum but less than 4.5% per annum, Foresight shall be entitled to such proportion of its annual management charge for the relevant financial year as will result in the annual returns on Your Portfolio for the Calculation Period being reduced to no less than 3.5% per annum (and the balance of Foresight s annual management charge for the financial year will accrue and be carried forward to subsequent Calculation Periods); If at the end of the relevant Calculation Period, the annual return on Your Portfolio is less than 3.5% per annum, Foresight shall not be entitled to its annual management charge for the relevant financial year (and such annual management charges will accrue and be carried forward to subsequent Calculation Periods); Annual management charges to which Foresight is entitled to be paid in respect of a financial year pursuant to clause 6.4 of this Customer Agreement shall be paid as follows: (a) in four equal quarterly amounts in advance as a payment on account (or, in respect of a financial year which is not 12 months, such amounts and on such dates as Foresight shall determine); (b) to the extent that the payments on account paid to Foresight in respect of the financial year are less than the annual management charges payable for that year then the balance of the fees shall be payable to Foresight within one month of the financial year end; and (c) to the extent that the payments on account paid to Foresight in respect of the financial year are more than the annual management charges payable for that year the excess amount shall be repaid by Foresight within one month of the financial year end; Annual management charges will normally be paid by the companies in which You hold Qualifying Investments. For the avoidance of doubt no part of an annual management charge actually paid to Foresight (other than payments on account) shall be repayable if annual returns for a Calculation Period ending after the date of payment have fallen; In the event of a withdrawal from investments in Your Portfolio, the Net Investment Amount on which the annual management charges are based will be reduced by the original cost attaching to the investment withdrawn. 6.5 Foresight and/or Affiliates will in respect of each financial year of the Foresight ITS and the Foresight Accelerated ITS charge a company secretarial fee to the companies in which the Foresight ITS and the Foresight Accelerated ITS directly invest of 60,000 per annum or, if greater, 0.3% of the gross amount of all monies invested in companies through both the Foresight ITS and the Foresight Accelerated ITS at the end of such year. The company secretarial fee will be paid annually and is included within the cap on normal running and administrative costs as set out in clause 6.7 of this Customer Agreement. 6.6 Foresight and/or its Affiliates will charge transaction arrangement fees in respect of underlying companies and trades funded through the Foresight ITS and the Foresight Accelerated ITS. We will ensure that such fees will range between 0.5% to 1.5% of the amount of the Foresight ITS and the Foresight Accelerated ITS funds value per annum. Applicable VAT will be charged where appropriate. 6.7 Foresight will ensure that in relation to each financial year of the Foresight ITS normal running and administration costs of the companies in which the Foresight ITS and the Foresight Accelerated ITS directly invest do not exceed 0.7% of the value of the Portfolios of all investors in the Foresight ITS and the Foresight Accelerated ITS at the end of that financial year. Such expenses will include the Foresight secretarial fees referred to at clause 6.5 of this Customer Agreement, directors fees, audit fees, adviser fees, regulatory fees and any other general expenses incurred in operating the companies. Expenses will not include the Foresight annual management charges, stamp duty, the costs and expenses of the entities in which such bodies corporate themselves invest and the investment costs of the underlying investments (including arrangement fees referred to in clause 6.6 of this Customer Agreement). 6.8 Foresight may fix the financial year of the Foresight ITS from time to time. 6.9 All costs and expenses are stated exclusive of value added tax, if applicable. 7. Delegation and Use of Agents 7.1 Any of Our functions under this Customer Agreement may be delegated to an Affiliate or suitably qualified (and if relevant, appropriately regulated) third party of Our choice to perform such functions. This does not prevent the assignment by Us of any agreement pursuant to clause 20.1 of this Customer Agreement. 7.2 In particular, We may at Our discretion, delegate the provision of administration, nominee and safe custody services to such professional entity or entities as We see fit. We may change such entity and amend the terms of the relationship with such entity from time to time and will negotiate such terms on an arms length basis in good faith. 7.3 We will act in good faith and with due diligence in the selection, use and monitoring of third party agents and delegates. Save as provided in this clause 7.3 and clause 7.4 of this Customer Agreement We are not responsible or liable for the acts, omissions and errors of any agent or delegate. 7.4 Where any functions have been delegated to an Affiliate, We will, save as otherwise set out in this Customer Agreement, accept responsibility for all acts and omissions of such Affiliate as if they were Our own. 8. Custody 8.1 We may act as custodian of the assets comprised in the Foresight ITS from time to time, or will appoint a duly authorised Custodian to do so. 8.2 The Custodian will, subject to the Applicable Rules, hold all investments in Your Portfolio in safe custody on the following basis: title documents (if any) to investments in respect of which such documents are issued will be physically held by the Custodian; any registerable investment acquired for Your Portfolio will normally be registered in the name of the Custodian or its nominee company; and any documents of title to investments in bearer form will be held by the Custodian. 8.3 Investments held by the Custodian for the account of Your Portfolio may be pooled with other holdings held by the Custodian and, as such, may not be readily identifiable by separate certificates, other physical documents of title or equivalent electronic record. As a result, should the Custodian default, You will share in any shortfall in proportion to Your original share of any investments in the Custodian s pool. In addition, where the Custodian holds the same investments for You and another investor in the Foresight ITS, Your investments may in effect be used to settle that other investor s transaction, which will not affect the Custodian s record of Your entitlements. 8.4 We have discretion to exercise or decline to exercise any conversion, subscription, voting or other rights relating to investments held in Your Portfolio, and to give suitable instructions to the Custodian, without consulting with You beforehand. By entering into this Customer Agreement, You hereby authorise Foresight to act on Your behalf and exercise all rights attaching to the investments held in Your Portfolio as it shall deem fit and at its discretion. 9. Client Money 9.1 When your Application Form has been accepted, following processing of the application and investment monies by the Receiving Agent, We will deposit cash received from You in connection with the

25 Customer Agreement Foresight ITS with a custodian authorised to hold client money either in the UK or Guernsey. The Custodian will be instructed to hold your money pending investment using a segregated, omnibus client bank account held with an Approved Bank in the United Kingdom or Guernsey. This account will have trust status and will be kept separate from any money belonging to Us or to the Custodian in Our/its own right. The initial Custodian is intended to be Foresight Group CI Limited (which is authorised and regulated by the Guernsey Financial Services Commission). Neither the Custodian nor the Receiving Agent is subject to the FCA s client money rules and, therefore, any of Your monies held by the Custodian or the Receiving Agent will not receive the protections afforded by the FCA s client money rules. No responsibility is accepted for any acts or omissions of the Custodian (unless it is an Affiliate) or the Approved Bank. Should the Custodian or the Approved Bank become insolvent, We will claim on behalf of Our clients. If the Approved Bank cannot repay all of its creditors, any shortfall may have to be shared proportionately between them. However, the Approved Banks used will either be covered by the UK Financial Services Compensation Scheme for up to 75,000 per investor or the Guernsey Banking Deposit Compensation Scheme for up to 50,000 per investor. Interest will not accrue on uninvested cash until deposited with the Approved Bank. Any interest earned on cash balances will be added to Your Portfolio. 9.2 After termination of this Customer Agreement, We may, subject to the Applicable Rules, retain Your money for Our own discretion if it remains unclaimed for a period of at least six years and provided that We have taken reasonable steps to trace You and return the balance. 10. Valuations and Reports 10.1 You will receive statements twice a year, comprising the cost and current value, of all underlying investments, within Your Portfolio as at the last Business Day of the period in question. All such reports will be provided within 90 days of the period end. On request We can provide You with statements every three months All investments will be valued at close of business on the last Business Day of the relevant period as stated in clause 10.3 of this Customer Agreement. Periodic statements will also show income and interest credited to Your Portfolio, deductions and fees charged or accrued and transactions made within the period Foresight will value the investments, including capital and income returns, in Your Portfolio quarterly and on a basis consistent with the valuation principles issued by the British Private Equity and Venture Capital Association from time to time, but principally using discounted cashflows. In calculating the fees and charges of Foresight relevant to income or capital returns, or annual returns for any period the applicable valuation statements issued by Foresight or Affiliates in relation to Your Portfolio shall be final and binding. The performance of the investments held within Your Portfolio will not be measured against any stock market or other index. 11. Conflicts of Interest We have implemented a conflicts of interest policy that identifies those circumstances that constitute, or may give rise to, conflicts of interest that pose a material risk of damage to Our customers. This policy also addresses the effective organisational and administrative arrangements that We maintain and operate to manage those conflicts. A copy of such policy is available on request. Your attention is drawn to clause 4.4 of this Customer Agreement. 12. Dealing 12.1 In effecting transactions for the Foresight ITS, We will act in accordance with the FCA Rules We will act in good faith and with due diligence in Our choice and use of counterparties. All transactions will be effected in accordance with the rules and regulations of the relevant market, exchange or trading facility (if relevant), and We may take all such steps as may be required or permitted by such rules and regulations and/ or by appropriate market practice We may aggregate transactions with those of other customers and employees of Us and Our Affiliates in accordance with the Applicable Rules. It is likely that the effect of such an allocation will not work to Your disadvantage, however, occasionally, this may not be the case. We will allocate aggregated transactions promptly on a fair basis in accordance with the requirements of the Applicable Rules (if applicable) so that: (a) if there is any conflict between the provisions of this Customer Agreement and any such rules, customs or Applicable Rules, the latter shall prevail; and (b) action may be taken as thought fit in order to ensure compliance with any such rules, customs or Applicable Rules. You should, however, be aware that Your Portfolio will be invested in a range of unlisted securities and there is generally no relevant market or exchange and consequent rules and customs and there will be varying practices for different securities. Transactions in shares of such securities will be effected on the best commercial terms which can be secured Save as detailed in clause 2.3 of this Customer Agreement, We shall take reasonable steps to obtain the best possible result when executing orders. This duty of best execution is owed by Us to the Foresight ITS, further details of which are set out in the Order Execution Policy, provided in the Schedule to this Customer Agreement. 13. Liability 13.1 We will act in good faith and with due diligence in managing Your Portfolio in accordance with this Customer Agreement. We accept responsibility for loss to You only to the extent that such loss is due to negligence or wilful default by Us or Our Affiliates. We will not be responsible for any losses to the extent arising from any information provided by You and/or your agent being untrue, inaccurate or incomplete Should the Custodian fail to deliver any necessary documents or to account for any investments, We will take all reasonable steps on Your behalf to recover such documents or investments or any sums due or compensation in lieu thereof but save where the Custodian is Our Affiliate, and subject to Our general duty of good faith, no liability is accepted for such failure Save as provided in the Applicable Rules if there is a total or partial failure, interruption or delay in the performance of Our obligations to the extent resulting from acts, events or circumstances not reasonably within Our control (including, but not limited to: acts or regulations of any governmental, regulatory or supranational bodies or authorities; breakdown, failure or malfunction of any telecommunications or computer service or services; and acts of war, terrorism or civil unrest) We shall not be liable to You or in breach of this Customer Agreement Subject to clause 13.1 of this Customer Agreement, We shall not be liable for any loss or damage of any direct or indirect nature caused by changes in revenue law or practice as determined by HMRC from time to time We will assume that all investments made on Your behalf under the Foresight ITS are new investments requiring a full two year holding period for BPR and will report to You on this basis. If You are transferring an existing BPR investment into the Foresight ITS it will be Your responsibility to assess Your holding period for BPR and whether any transfer prejudices any prior holding period (and We accept no responsibility in this regard) Nothing in clauses 13.1 to 13.4 of this Customer Agreement shall limit any liability We may have to You under the terms of the Applicable Rules No responsibility is accepted for loss of an indirect or consequential nature such as loss of goodwill, profit or opportunity Nothing in this Customer Agreement 25

26 Customer Agreement shall exclude or limit Our liability for fraud or fraudulent misrepresentation by Us or Our Affiliates or for death or personal injury. 14. Withdrawals 14.1 Any request for, or other necessary, withdrawal from investments in Your Portfolio (including regular and ad hoc withdrawals) must be made in writing. Withdrawals will generally be made through a disposal of Your holding in shares which may be taxable to income tax or capital gains tax. Foresight will endeavour to effect withdrawals in as tax efficient manner as possible at the time, typically with a capital gains tax treatment, but this cannot be guaranteed (in particular for full withdrawals). We may, from time to time, effect withdrawals by way of dividends. Subject to availability of readily realisable funds, We will realise the cash sum required and pay the net sale proceeds over to You upon receipt of such proceeds by Us into Your nominated bank account (net of any applicable charges or sums due). If We are required to effect a share buyback to generate realisable funds to enable a withdrawal request, or if there are a substantial number of withdrawal requests, there may be a considerable delay in paying out on the withdrawal request We may deduct from funds payable to You (or at your direction) any fees, charges or sums due or payable to Us or any Affiliates or any delegates In exceptional circumstances such as a change in law or practice We may choose to satisfy withdrawal requests (including on termination) wholly or partly by the transfer of investments. 15. Amendments We may amend the terms of this Customer Agreement or Our arrangements with You by sending You written notice. Such changes shall take effect on the date specified in the notice being not less than ten Business Days from the date of such notice unless the changes are for legal or regulatory reasons when such changes shall take effect on the date specified in the notice. 16. Termination 16.1 You may terminate this Customer Agreement at any time by notice in writing to Us. Foresight may terminate this Customer Agreement by giving You 30 days written notice. Where required to do so by applicable law or regulation or where it becomes impossible, impractical or unreasonable for Us to continue to manage Your Portfolio We may terminate this Customer Agreement immediately by notice in writing. Termination will not affect accrued rights or any contractual provision intended to survive termination, in particular in relation to the liquidation and/ or distribution of Your Portfolio Following termination We will liquidate the investments in Your Portfolio in an orderly fashion. The net proceeds of sale will be remitted to You after all deductions permitted by this Customer Agreement We reserve the right to settle outstanding transactions for Your Portfolio at the effective date of termination Where We are required to liquidate Your Portfolio, this may take place over an extended period of time as there may be limited liquidity for Your Portfolio s investments Subject to clause 16.3 of this Customer Agreement, termination will take effect on the date stated in the written notice of termination provided that date is no earlier than the date of receipt of the termination notice by Foresight or any later date agreed with You; and shall be without prejudice to the completion of transactions already initiated, which shall be completed in an orderly manner On termination, You will be liable to pay (meaning that We may debit from Your Portfolio and/or any cash payable to you or, if there are insufficient funds, invoice You): all fees and other charges mentioned at clause 6 of this Customer Agreement, accrued and remaining outstanding at the date of termination; any additional expenses necessarily incurred by Us in terminating this Customer Agreement and winding up Your Portfolio; and Our charges (if any) in connection with liquidating Your investments or transferring Your investments into Your name On termination, We may retain and/or realise such investments as may be required to settle transactions already initiated and to pay Your outstanding liabilities. If there is a dispute as to the payment of fees to Us, You may require the disputed amount to be held in an escrow account pending resolution of the dispute Please note that if Qualifying Investments are sold You will lose any potential entitlement to BPR unless the sale proceeds are reinvested into other relevant business property and HMRC accepts that the new Qualifying Investments have replaced the old Qualifying Investments within the meaning of section 107 Inheritance Tax Act We will endeavour to liquidate all investments comprising Your Portfolio within a reasonable time, but given the nature of the investments no liability is accepted in respect of any delays. You acknowledge that in the event of any material change to the legislation governing Qualifying Investments, the liquidation of investments may take a considerable period of time We will provide You with a closing valuation of the Portfolio prepared in the manner described above once all outstanding transactions have been accounted for and from which point Our management responsibility for the Portfolio will cease entirely. 17. Data Protection and Consents 17.1 We are registered under the Data Protection Act 1998 and, as such, may keep records in which Your name and certain personal information will be stored. Certain information may be shared with Affiliates and/or the Custodian and/or the Receiving Agent and/or the Approved Bank in connection with the Foresight ITS or for administrative reasons. We may also share some or all of Your information with regulatory bodies if We are required, or consider ourselves obliged, to do so in accordance with Applicable Rules, and with other governmental, judicial, law enforcement bodies if required to do so. You consent to Us keeping You informed by mail or telephone of other services and products which We and Our Affiliates may from time to time consider of interest to You We will at all times keep confidential all of Your information acquired in connection with the Foresight ITS, except for information which: (a) is in the public domain; or (b) We may be entitled or bound to disclose under the Applicable Rules; or (c) is requested by regulatory agencies; or (d) is given to professional advisers where reasonably necessary for the performance of their professional services; or (e) is authorised to be disclosed by You, and shall use reasonable endeavours to prevent any breach of this clause 17.2 of this Customer Agreement We will procure that any agent or delegate that is an Affiliate appointed by Us will observe and comply with the provisions of clauses 17.2 and/or 17.3 of this Customer Agreement You have the right, upon payment of a reasonable fee, to receive a copy of the information that Foresight holds about You to the extent that it constitutes personal information. For more details, please write to the Compliance Officer. 18. Risk Factors and Further Disclosures 18.1 Your attention is drawn to the risk factors set out on pages 20 and 21 of the Investor Guide. The Foresight ITS will not be suitable for everybody and it is important that You consider these risks, and the nature of the investment, seeking advice from Your financial or tax adviser as required The value of investments and the income derived from them may go down as well as up and You may not get back some or the entire amount invested. Due 26

27 Customer Agreement to the nature of tax reliefs available under the Foresight ITS, an investment in the Foresight ITS is not suitable as a short term investment and should be held for at least two years No monies shall be borrowed nor securities (or similar transactions) granted or entered into for the account of Your Portfolio Subject to clause 16.6 of this Customer Agreement, there is no requirement for additional monies to be called upon for addition to Your Portfolio No investments in warrants, in units in collective investment schemes or in derivatives of any sort shall be made in any Portfolio. 19. Complaints Procedure and Compensation 19.1 If You have a complaint, You can contact Us via phone, or in writing as follows: For the attention of Foresight ITS Investor Relations, Foresight Group LLP, The Shard, 32 London Bridge Street, London SE1 9SG its@foresightgroup.eu. We will investigate the circumstances and report back to You. A copy of Our complaints handling procedure is available on request Complaints that We are unable to settle may be referred to the Financial Ombudsman Service, which is an independent service set up to resolve disputes between customers and businesses providing financial services. The Financial Ombudsman Service can be contacted at: South Quay Plaza, 183 Marsh Wall, London E14 9SR. Further information can be found at Foresight is covered by the Financial Services Compensation Scheme as referred to in clause 2.6 of this Customer Agreement. 20. General 20.1 We may assign the benefit of this Customer Agreement to any appropriately authorised and regulated person, such assignment being effective upon written notice to You. This Customer Agreement is personal to You and You may not assign it This Customer Agreement constitutes the entire agreement between Us in respect of Your Portfolio and the Foresight ITS and supersedes any other or previous terms and conditions. Save as provided in clause 15 of this Customer Agreement, any amendment to this Customer Agreement shall be effective only if made in writing and agreed by both parties It is not intended that any term contained in this Customer Agreement shall be enforceable, whether by virtue of the Contracts (Rights of Third Parties) Act 1999, common law or otherwise, by any person who is not a party to this Customer Agreement save that any Affiliate shall have the benefit of any provision of this Customer Agreement expressed to be for the benefit of Affiliates If any part of the wording of this Customer Agreement shall become or is declared to be illegal, invalid or unenforceable for any reason, such part or wording shall be deleted and shall be divisible from the rest of the Customer Agreement, which will continue in force The failure of Foresight or its Affiliates to exercise or delay in exercising a right or remedy provided by this Customer Agreement or by law does not constitute a waiver of the right or remedy or a waiver of other rights or remedies Any notice under or relating to this Customer Agreement shall be in writing. We may send any communication to You at the address which You provide to Us in the Application Form (or to any provided postal address or address). You must communicate with Us at Foresight Group LLP, The Shard, 32 London Bridge Street, London SE1 9SG (or such other postal address notified to You for this purpose). Notice sent by first class post to such address is deemed to have arrived on the second Business Day after posting. Notice sent by fax or or hand-delivered is deemed to be delivered immediately (or on the next Business Day if sent after 5pm on a Business Day or on a non-business Day). Our telephone number is Telephone calls may be recorded or monitored for Our mutual protection This Customer Agreement shall be governed by and construed in all respects in accordance with English law and You hereby submit to the exclusive jurisdiction of the English Courts in relation to any disputes arising out of or in connection with this Customer Agreement This Customer Agreement is supplied in English, and We will only be required to communicate in English during the course of our relationship with You Where You comprise more than one person at any time We may rely upon any notice from any one of such persons on behalf of You and any waiver or agreement with any one of such persons shall be binding upon You. On the death of a joint holder we shall be entitled to treat the survivor(s) as the only person(s) having title or ownership of the Portfolio of the joint holder On and following Your death. We may (acting in good faith) act on the directions of Your personal representatives or the persons holding themselves out as Your personal representatives pending grant of representation. SCHEDULE ORDER EXECUTION POLICY Execution factors and execution criteria We have an obligation when executing orders for the Foresight ITS to obtain the best possible outcome. The FCA requires various execution factors to be taken into account including price; cost; speed; market impact; likelihood of execution and settlement; size; or any other consideration meriting a high relative importance in obtaining the best possible result. However, in some circumstances, We may appropriately determine that other execution factors are more important than price in obtaining the best possible execution result. We will determine the relative importance of the execution factors by using Our commercial judgement and experience in light of market information available and taking into account the execution criteria. The execution criteria are defined as the characteristics of the client, order (orders placed in the market will indicate a price range that is suitable for the investment decision), type of financial instrument (some shares are more liquid than others, and illiquid shares will be less easily tradable in volume) and the execution venue. The scope of activities undertaken by Us does not currently include placing orders with brokers or dealers. Should We place orders with brokers or dealers for execution it will satisfy itself that the broker or dealer has arrangements in place to enable Us to comply with Our best execution obligations to Our clients. Specific arrangements will be put in place such that brokers will confirm that they will treat Us as a professional client and will, therefore, be obliged to provide best execution. Special purpose vehicles ( SPVs ) We may establish special purpose vehicles for the purpose of investments. As shares in SPVs cannot be obtained from any other sources there is limited opportunity to apply some of the execution factors. Monitoring and review We will review the effectiveness of Our execution policy and order execution arrangements on an annual basis. Whenever a material change occurs that affects Our ability to continue to obtain the best possible result for You, We will notify You of any material changes to Our execution arrangements or Our execution policy by posting an updated version on Our website ( 27

28 Application Procedures Foresight Inheritance Tax Solution SECTION 1 Please insert your full name(s), permanent address, daytime and evening telephone numbers, date(s) of birth, National Insurance number(s) and address(es). If you are not a UK resident, please provide your Tax Identification Number (TIN) for FATCA or CRS purposes. Foresight may, if necessary, disclose information to HMRC or other tax authorities in order to satisfy its FATCA or CRS obligations. SECTION 2 If you are acting as an attorney under a Power of Attorney (POA), please include a certified copy of the Power of Attorney document and verification of identity documents for each POA with this application, and indicate where correspondence should be sent. SECTION 3 (SECTION 2 FOR TRUSTEES) Please indicate to whom you would like us to send communications. If you do not indicate a preference, correspondence will be sent to you directly. SECTION 4 (SECTION 3 FOR TRUSTEES) Please note that the minimum subscription is 25,000. Attach your cheque or bankers draft to the Application Form for the total amount of your investment. Alternatively, you can make your investment via bank transfer. Please make cheques payable to The City Partnership (UK) Limited - Foresight ITS and crossed A/C Payee only. Cheques must be from a recognised UK Bank or Building Society account and your payment must relate solely to this application. Please note that the amount set aside from your subscription in connection with initial product and adviser charges will not be invested in the Foresight ITS and will not subsequently benefit from BPR. Bank transfers should be paid to: Sort code: A/c no: A/c Name: The City Partnership (UK) Limited Foresight ITS Bank: Bank of Scotland SWIFT: BOFSGB2S IBAN: GB66 BOFS Please reference bank transfers with your surname and initials. SECTION 5 (SECTION 4 FOR TRUSTEES) Please confirm whether you would like to draw down a fixed percentage of your initial investment every year (after the first anniversary) or retain returns within the investment (growth option). SECTION 6 (SECTION 5 FOR TRUSTEES) Complete the details of any charges that you have agreed with your financial intermediary and that you wish Foresight to facilitate. SECTION 7 (SECTION 6 FOR TRUSTEES) Read the declaration, sign and date the Application Form and attach the verification documents as set out in the checklist below. Please send your completed Application Form, together with your cheque or bankers draft to The City Partnership (UK) Limited, 110 George Street, Edinburgh EH2 4LH. If you have any questions on how to complete the Application Form please contact Foresight on WHO CAN APPLY You can only apply if your financial intermediary has certified that participation in the Foresight ITS meets your objectives, you have the expertise, experience and knowledge to understand the risks and that you are able to bear the associated risk involved in participating in the Foresight ITS. We reserve the right to accept Application Forms without an Adviser Certificate if we are otherwise satisfied with all applicable legal and regulatory requirements. ADVISER CERTIFICATE Financial Advisers authorised by the Financial Conduct Authority must complete the Adviser Certificate. FINANCIAL ADVICE, ASSESSMENT AND CUSTOMER DUE DILIGENCE PROCEDURES You must arrange for a financial intermediary authorised by the FCA to carry out (i) a suitability assessment in accordance with COBS 9 to ensure that you have the requisite knowledge and experience to participate in the Foresight ITS, and that it meets, and is suitable for, your needs in light of your financial situation and investment objectives and (ii) the customer due diligence procedures required by the Money Laundering Regulations 2007 within the guidance for the UK Financial Sector issued by the Joint Money Laundering Steering Group. CERTIFICATION GUIDELINES By CERTIFIED COPIES we mean that the copy documents requested must be certified by a person such as a solicitor/ notary public/accountant/banker/ local police officer or other professional person. Documents cannot be certified by the Applicant. The person certifying the copy document must (i) mark the copy document as a true and exact copy of the original, which I have seen and (ii) where the document concerned contains a photo as proof of identity, confirm that the photograph is a true likeness of the person named in the document, and (iii) sign and date the copy document, stating in what capacity they are acting. APPLICATIONS NOT ACCEPTED If any application is not accepted, the amount paid on application will be returned to the applicant, without interest, and less any charges incurred in returning such monies. Foresight reserves the right to obtain additional information either at the point of the application or during the lifetime of the investment in order to comply with Applicable Rules. APPLICATION CHECKLIST Please make sure that: All parts of the Application Form are complete The Application Form is signed and dated The Adviser Certificate is completed, signed and dated Payment has been arranged or a cheque/bankers draft attached to the Application Form If acting as an attorney under a POA, a certified copy of the POA is attached plus verification of identification documents for each of the named attorneys All of the above is sent to: The City Partnership (UK) Limited, 110 George Street, Edinburgh EH2 4LH 28

29 Application Form - Investor/Joint Applicants Foresight Inheritance Tax Solution Before completing this form, please read the Investor Guide and Customer Agreement marked June 2016 and take independent advice. Definitions used in the Investor Guide and Customer Agreement apply herein. *mandatory (as applicable) SECTION 1: PERSONAL DETAILS APPLICANT 1 *TITLE: MR/MRS/MISS/MS/DR/OTHER: *FORENAMES: *SURNAME: *ADDRESS: *DATE OF BIRTH: *NATIONAL INSURANCE NO: TEL NO (DAY): TEL NO (EVENING): I AM/WE ARE EXISTING INVESTOR(S) WITH FORESIGHT GROUP *POSTCODE: *COUNTRY OF RESIDENCE: *IF NOT UK PROVIDE YOUR TAX IDENTIFICATION NO. (TIN) APPLICANT 2 (FOR JOINT APPLICATIONS ONLY) *TITLE: MR/MRS/MISS/MS/DR/OTHER: *FORENAMES: *SURNAME: *ADDRESS: *DATE OF BIRTH: *NATIONAL INSURANCE NO: TEL NO (DAY): TEL NO (EVENING): I AM/WE ARE EXISTING INVESTOR(S) WITH FORESIGHT GROUP *POSTCODE: *COUNTRY OF RESIDENCE: *IF NOT UK PROVIDE YOUR TAX IDENTIFICATION NO. (TIN) FORESIGHT MAY (IF NECESSARY) DISCLOSE INFORMATION TO HMRC OR OTHER TAX AUTHORITIES IN ORDER TO SATISFY ITS FATCA OR CRS OBLIGATIONS. SECTION 2: POWERS OF ATTORNEY PLEASE NOTE, if an application is being made under POA, please include a certified copy of the POA document. Please note that Foresight will need to verify the identity of all attorneys who sign this form for money laundering purposes and may run electronic identification checks to do so. TITLE: MR/MRS/MISS/MS/DR/OTHER: ADDRESS: FORENAMES: SURNAME: POSTCODE: SECTION 3: INVESTOR SERVICES (PLEASE TICK ONE ONLY) HOW WOULD YOU LIKE TO BE UPDATED ABOUT YOUR INVESTMENT? DIRECT (Hard copies will be sent to you) ATTORNEY UNDER POA (as per section 2) ADVISER ONLY (Your adviser will be responsible for updating you) PLEASE NOTE: copies of all correspondence relating to your investment will be automatically sent to your adviser 48 hours prior to being sent. 29

30 Application Form - Investor/Joint Applicants Foresight Inheritance Tax Solution SECTION 4: YOUR SUBSCRIPTION (PLEASE TICK ONE ONLY) SUBSCRIPTION AMOUNT (MINIMUM 25,000): (INSERT AMOUNT IN FIGURES) I/WE ENCLOSE A CHEQUE OR BANKERS DRAFT DRAWN ON A UK CLEARING BANK OR BUILDING SOCIETY, MADE PAYABLE TO THE CITY PARTNERSHIP (UK) LIMITED - FORESIGHT ITS - OR I/WE TRANSFERRED THE ABOVE FUNDS VIA BACS/CHAPS INTO THE FORESIGHT ITS BANK ACCOUNT REFERRED TO IN THE APPLICATION PROCEDURES (ON PAGE 28) AND REFERENCED WITH MY NAME. SECTION 5: REGULAR WITHDRAWALS (AVAILABLE AFTER 12 MONTHS) I/WE WOULD LIKE TO THE RETURNS TO REMAIN WITHIN THE INVESTMENT (GROWTH OPTION) - OR I/WE WOULD LIKE TO MAKE CASH WITHDRAWALS OF % OF THE AMOUNT INVESTED BY ME/US EACH YEAR I/WE WOULD LIKE TO MAKE CASH WITHDRAWALS PAID: MONTHLY QUARTERLY SEMI-ANNUAL ANNUAL IF YOU REQUEST TO MAKE REGULAR CASH WITHDRAWALS, THESE WILL GENERALLY BE FACILITATED THROUGH A DISPOSAL OF SHARES. PLEASE SEE PAGES 20 AND 21 OF THE INVESTOR GUIDE FOR TAXATION CONSEQUENCES. If making withdrawals please nominate a bank account where you would like this to be paid - if not making withdrawals leave blank ACCOUNT NAME: BANK/BUILDING SOCIETY: ADDRESS: POST CODE: SORT CODE: ACCOUNT NUMBER: SECTION 6: DETAILS OF AGREED ADVISER CHARGES TO BE FACILITATED (IF APPLICABLE) UPFRONT CHARGES FIXED AMOUNT OR PERCENTAGE % If you request us to facilitate upfront charges on a percentage basis, these will be calculated as a percentage of the monies you subscribe. ONGOING CHARGES FIXED AMOUNT OR PERCENTAGE % No. of years ongoing charges are payable YRS If you request us to facilitate ongoing charges as a percentage basis, these will be calculated as a percentage of the value of Your Portfolio when calculated. Please enter bank account details for adviser charges on page

31 Application Form - Investor/Joint Applicants YOUR RIGHT TO CANCEL You have a right to cancel the Customer Agreement. Following acceptance of your application form, you will be sent a cancellation notice and will then have 14 days in which to cancel the Customer Agreement. Full details of how to cancel, and the consequences of cancellation, appear at clause 3.4 of the Customer Agreement. Because you have this right to cancel, Foresight Group LLP will not act on any investment instruction until this 14 day period has expired. WAIVING YOUR RIGHT TO CANCEL Should you wish Foresight Group LLP to proceed to buy investments for your portfolio before the 14 day period expires, then you have the right to request this. Please note that this will result in you losing the right to cancel the Customer Agreement. If you subsequently choose to terminate the Customer Agreement, we will carry out your instruction in accordance with termination provisions in paragraph 16 of the Customer Agreement. In the event of such termination, you will incur the fees and charges mentioned in clause 6 of the Customer Agreement. If you wish to instruct Foresight Group LLP to invest your monies as soon as possible following acceptance of your application form, you may do this by ticking the box below. By ticking the box, you also confirm that you understand that will lose the right to cancel the Customer Agreement and the consequences of this. I WISH TO INSTRUCT FORESIGHT GROUP LLP TO INVEST MY SUBSCRIPTION AS SOON AS POSSIBLE FOLLOWING ACCEPTANCE OF MY APPLICATION FORM. I UNDERSTAND THAT THIS INSTRUCTION WILL RESULT IN ME LOSING MY RIGHT TO CANCEL THE CUSTOMER AGREEMENT, AND I UNDERSTAND THE CONSEQUENCES OF LOSING THIS RIGHT. SECTION 7: SIGNATURES AND ACKNOWLEDGEMENTS IF THIS FORM IS COMPLETED AND SIGNED BY THE INVESTOR(S) NAMED IN SECTION 1: i. I/we confirm I/we wish to subscribe the amount shown in section 4 in the Foresight ITS; ii. I/we confirm I/we have read and understood the Investor Guide and Customer Agreement marked June 2016 on the front cover and the risk factors set out in it; iii. I/we confirm I/we have read and understood the investment objectives of the Foresight ITS; iv. I/we confirm I am/we are applying on my/our own behalf; v. I/we request that Foresight makes facilitation payments in respect of the charges set out in section 6 above, as detailed in the Investor Guide and Customer Agreement, to the financial intermediary identified in the Adviser Certificate accompanying this Application Form; and vi. I/we acknowledge that the amount set aside from my/our subscription in connection with initial product and adviser charges will not be invested in the Foresight ITS and will not subsequently benefit from BPR, and that all indications of possible returns stated in the Investor Guide are based on amounts invested in the Foresight ITS after the setting aside of any such fees. In the case of an attorney under POA by signing this form on behalf of the investor(s) whose details are shown above, I/we,the attorney make a declaration (on behalf of such investor(s)) on the terms of sub paragraphs i. to vi. above. Please send the completed Application Form, together with your cheque or bankers draft to The City Partnership (UK) Limited, 110 George Street, Edinburgh EH2 4LH. SIGNATURE OF APPLICANT 1 or attorney under POA (if applicable). SIGNATURE OF APPLICANT 2 or attorney under POA (if applicable). DATE: DATE: Data protection: The City Partnership (UK) Limited, Foresight and its Affiliates who have been appointed or delegated to provide services in relation to the Foresight ITS will use the information you give for administration, research and statistical purposes. Information provided by you will be held in confidence by these parties and will not be passed on to other product or service companies. Your details may be used by Foresight or its Affiliates to send you information on other products and services. If you would prefer not to receive such information, please tick this box. 31

32 32

33 Application Form - Trustees Foresight Inheritance Tax Solution Before completing this form, please read the Investor Guide and Customer Agreement marked June 2016 and take independent advice. *mandatory (as applicable) SECTION 1: IF THE APPLICATION IS BY A TRUST, PLEASE PROVIDE THE FOLLOWING INFORMATION *FULL NAME: *COUNTRY OF ESTABLISHMENT: *NATURE & PURPOSE OF THE TRUST (e.g. discretionary, testamentary, bare): *NAME OF ALL TRUSTEES: NAME AND ADDRESS OF ANY PROTECTOR OR CONTROLLER: POSTCODE: If the trustees are regulated in the UK, please state the name of the regulator: (Otherwise please provide a Certified Copy of the trust deed) SECTION 2: INVESTOR SERVICES (PLEASE TICK) HOW WOULD YOU LIKE TO BE UPDATED ABOUT YOUR INVESTMENT? DIRECT OR ADVISER ONLY PLEASE NOTE: electronic copies of all correspondence relating to your investment will be automatically sent to your adviser 48 hours prior to being posted. PLEASE NOTE: your adviser will be responsible for updating you. SECTION 3: YOUR SUBSCRIPTION (PLEASE TICK ONE ONLY) SUBSCRIPTION AMOUNT (MINIMUM 25,000): (INSERT AMOUNT IN FIGURES) WE ENCLOSE A CHEQUE OR BANKERS DRAFT DRAWN ON A UK CLEARING BANK OR BUILDING SOCIETY, MADE PAYABLE TO THE CITY PARTNERSHIP (UK) LIMITED - FORESIGHT ITS - OR WE TRANSFERRED THE ABOVE FUNDS VIA BACS/CHAPS INTO FORESIGHT ITS BANK ACCOUNT REFERRED TO IN THE APPLICATION PROCEDURES (ON PAGE 28) AND REFERENCED WITH OUR NAME. 33

34 Application Form - Trustees Foresight Inheritance Tax Solution SECTION 4: REGULAR WITHDRAWALS (AVAILABLE AFTER 12 MONTHS) WE WOULD LIKE TO THE RETURNS TO REMAIN WITHIN THE INVESTMENT (GROWTH OPTION) - OR WE WOULD LIKE TO MAKE CASH WITHDRAWALS OF % OF THE AMOUNT INVESTED BY ME/US EACH YEAR WE WOULD LIKE TO MAKE CASH WITHDRAWALS PAID: QUARTERLY SEMI-ANNUAL ANNUAL IF YOU REQUEST TO MAKE REGULAR CASH WITHDRAWALS, THESE WILL GENERALLY BE FACILITATED THROUGH A DISPOSAL OF SHARES. PLEASE SEE PAGES 20 AND 21 OF THE INVESTOR GUIDE FOR TAXATION CONSEQUENCES. If making withdrawals please nominate a bank account where you would like this to be paid - if not making withdrawals leave blank ACCOUNT NAME: BANK/BUILDING SOCIETY: ADDRESS: POST CODE: SORT CODE: ACCOUNT NUMBER: SECTION 5: DETAILS OF AGREED ADVISOR CHARGES TO BE FACILITATED UPFRONT CHARGES FIXED AMOUNT OR PERCENTAGE % If you request us to facilitate upfront charges on a percentage basis, these will be calculated as a percentage of the monies you invest. ONGOING CHARGES FIXED AMOUNT OR PERCENTAGE % No. of years ongoing charges are payable YRS If you request us to facilitate ongoing charges on a percentage basis, these will be calculated as a percentage of the value of Your Portfolio when calculated. Please enter bank account details for adviser charges on page 36. SECTION 6: SIGNATURES AND ACKNOWLEDGEMENTS IF THIS FORM IS COMPLETED AND SIGNED BY THE TRUSTEES NAMED IN SECTION 1: i. We confirm we wish to invest the amount shown in section 3 in the Foresight ITS: ii. We confirm we have read and understood the Investor Guide and Customer Agreement marked June 2016 on the front cover and the risk factors set out in it; iii. We confirm we have read and understood the investment objectives of the Foresight ITS; iv. We confirm we are applying on the trustees behalf; v. We request that Foresight makes facilitation payments in respect of the charges set out in section 5 above, as detailed in the Investor Guide and Customer Agreement, to the financial adviser identified in the Adviser Certificate accompanying this Application Form; and vi. We acknowledge that the amount set aside from our subscription in connection with initial product and adviser charges will not be invested in the Foresight ITS and will not subsequently benefit from BPR, and that all indications of possible returns stated in the Investor Guide are based on amounts invested in the Foresight ITS after the setting aside of any such fees. Please send the completed Application Form, together with your cheque or bankers draft to: The City Partnership (UK) Limited, 110 George Street, Edinburgh EH2 4LH. SIGNATURE(S) OF TRUSTEE(S) DATE: Data protection: The City Partnership (UK) Limited, Foresight and its Affiliates who have been appointed or delegated to provide services in relation to the Foresight ITS will use the information you give for administration, research and statistical purposes. Information provided by you will be held in confidence by these parties and will not be passed on to other product or service companies. Your details may be used by Foresight or its Affiliates to send you information on other products and services. If you would prefer not to receive such information, please tick this box 34

35 Application Form - Adviser Certificate Foresight Inheritance Tax Solution TO BE COMPLETED BY YOUR FINANCIAL ADVISER WE CERTIFY TO FORESIGHT GROUP LLP AND CITY PARTNERSHIP (UK) LIMITED IN THE TERMS OF PARAGRAPHS 1 TO 4 BELOW IN RELATION TO THE APPLICANT(S) SET OUT IN THE ATTACHED APPLICATION FORM ( INVESTOR ): 1. We have undertaken an adequate assessment of the Investor s expertise, experience and knowledge and certify that, in the light of the nature of the transactions or services envisaged that an investment in the Foresight ITS is suitable for them. 2. We have applied customer due diligence measures on a risk-sensitive basis in respect of the Investor to the standard required by The Money Laundering Regulations 2007 within the guidance for the UK Financial Sector issued by the Joint Money Laundering Steering Group and we certify that we have: (a) identified and verified the identity of the Investor on the basis of documents, data and information obtained from a reliable and independent source; (b) we have obtained information on the Investor s occupation and the source of funds to be used for the Investor s proposed investment in the Foresight ITS; (c) identified, where there is a beneficial owner who is not the Investor, the beneficial owner and have taken adequate measures, on the basis of documents, data and information obtained from a reliable and independent source, to verify his identity so that we know who the beneficial owner is, including, in the case of a legal person, trust or similar arrangement, measures to understand the ownership and control structure of the person, trust or arrangement; (d) obtained information on the purpose and intended nature of the Investor s proposed investment in the Foresight ITS, as the case may be, which information is from a reliable and independent source; and (e) systems to identify and monitor Politically Exposed Persons (PEPs); that the investor or any other relevant third party is not a PEP; and that we will provide information on the PEP status of investors who are clients of my firm upon request. 3. We understand that the Receiving Agent has obligations under The Money Laundering Regulations 2007 within the guidance for the UK Financial Sector issued by the Joint Money Laundering Steering Group and will cooperate with the Receiving Agent in the event of a request for copies of the due diligence materials we hold in respect of the Investor, and that we will provide the same within two business days of a request (see notes below). We acknowledge and agree that such request may cause us to request additional information from the Investor, and that the Receiving Agent reserves the right to contact the Investor directly in the event that all information is not provided within the above timeframe. We confirm that both we and the Investor are aware of and understand that failure to provide the information requested may cause the Receiving Agent to reject the application. 4. At any time during the life of the Investor s investment in the Foresight ITS, we will advise Foresight immediately should our relationship with the Investor terminate. We will promptly notify Foresight if we advise the Investor in relation to a Retail Investment Product or we otherwise cease to be entitled to receive ongoing adviser charges facilitated by Foresight and Foresight shall be entitled to cease to facilitate adviser charges to us. NOTES: 1. The Receiving Agent s obligation under The Money Laundering Regulations 2007 within the guidance for the UK Financial Sector issued by the Joint Money Laundering Steering Group extends from the point of receipt of an application through to the point that participation in the Foresight ITS is terminated. It must be noted that one or more requests for due diligence information may be made at any time during that period. 2. In the event the Receiving Agent requests information from a financial adviser in respect of an Investor, such request will be made in accordance with The Money Laundering Regulations 2007 within the guidance for the UK Financial Sector issued by the Joint Money Laundering Steering Group. If such information is insufficient to meet the needs of the Receiving Agent, the financial adviser will be required to obtain the additional information. 35

36 Application Form - Adviser Certificate Foresight Inheritance Tax Solution WE CONSENT TO FORESIGHT GROUP LLP RELYING ON THIS CERTIFICATE *mandatory (as applicable) *FIRM NAME: DIRECTLY AUTHORISED BY FCA OR AUTHORISED BY NETWORK NAME OF NETWORK: ADVISER DETAILS TITLE: *FORENAMES: *SURNAME: *FCA PARTNER REF. NO.: *NETWORK PARTNER REF. NO.: *ADVISER *CORRESPONDENCE CONTACT NAME: CORRESPONDENCE *FIRM ADDRESS FOR CORRESPONDENCE: *POSTCODE: *TELEPHONE: *SIGNATURE: FAX: *DATE: SPECIAL INSTRUCTIONS/NOTES (IF APPLICABLE) (Use a separate sheet and attach to the form if required) BANK ACCOUNT DETAILS (IF APPLICABLE) Please provide details of your bank account so that any agreed adviser charges to be facilitated by Foresight as set out in this Application Form can be paid to you. If you require us to pay these charges to your network, please advise accordingly. ACCOUNT NAME: BANK/BUILDING SOCIETY: SORT CODE: ACCOUNT NUMBER: (S) FOR CONFIRMATION OF ONGOING ADVISER CHARGES: BY SUBMITTING THIS APPLICATION FORM: i. I agree that I have read and understood the Foresight Group LLP Terms of Business for Authorised Financial Intermediaries and that I agree to be bound by such Terms of Business ii. To the extent I am an Appointed Representative, I warrant and represent that my principal has also accepted the Foresight Group LLP Terms of Business for Authorised Financial Intermediaries 36

37 Death and taxes may be inevitable, but they shouldn t be related. J.C. Watts, Jnr 37