Personal Loan & tax implications

I have recently been asked a question at work and wanted to know the tax implications; The owner of a company (who is a channel Islands resident) has paid a loan out of his PERSONAL bank account to an individual in order to entice them to join his company. The individual would pay back the loan if they left the company. The individual has loss of office built into their contract. The individual leaves the company and the owner refuses to pay the loss of office and instead says that the private loan is written off and so the individual does not need to pay it back. Is there a tax liability for the individual who is a UK resident or the owner of the company?

Hi Michael Lynch,

We would need more information in this instance regarding the terms of the loan/ contract/agreement before we can give a definitive answer.
The fact loss of office is in the individuals contract suggests the individual joined the company as an employee.
The guidance in EIM01490 suggests taxable as earnings if an employee.  
Please refer to :   EIM01490 - Employment income: loans released or written off

Thank you.