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Chapter IHTM28292

Document Cited authorities 1 Cited in Related
Vincent
Published date20 March 2016
Record NumberIHTM28292
CourtHM Revenue & Customs

You should not disallow a deduction for any sum that the transferor has agreed to pay just because the person they were due to was not a party to the agreement. But any sums payable must be legally enforceable, and you need to bear in mind the extent of consideration (IHTM28293).

Usually, where a contract is made under Scots Law between two parties, only they acquire rights and incur liabilities under the contract. A third party does not acquire either rights or liabilities under the contract.

But, if a contract between two parties is drawn up to benefit a third party or a class or group of people who are identified in the contract, it is said to confer a ‘jus quaesitum tertio’ on the third party. It must be clear from the wording of the contract that both contracting parties intended to confer a benefit on the third party, who would then be entitled to enforce performance of the...

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