To expand on Owlman's reply, it is lumber (wood) that normally has knots in US-English, not living trees. I think we need some context and perhaps a sentence to figure out what it is that you are asking.
Living trees have knots and boards both have knots. Knots don't suddenly appear when wood is sawn into boards. They're just harder to see in a living tree, where they look like knobs or lumps in the bark. An old pine tree can have lots of knots (and produce 'knotty pine' boards) boards, because pine trees tend to produce a lot of branches relatively low on the trunk that die off as the tree grows higher. Knots form at the base of the dead branches.
In the US (see #4) timber is commercially-useful wood in its living state. The process of cutting it down is 'timber harvesting.' Once it is turned into boards, it's lumber.