There’s a fine line between getting it wrong and being accused of evasion — and the Kirtlan case puts that line under a microscope.
Robert Kirtlan, a corporate adviser with international ties, moved to the UK in 2005. He leased a home, enrolled his child in school, and set himself up for a long-term stay. But when his wife and child returned to Australia within months, things became complicated. Over the next three years, Mr Kirtlan spent a significant amount of time in Australia — 173, 187, and 249 days respectively in the 2006 to 2008 income years.
Despite this, he lodged Australian tax returns as a non-resident. He also filed UK tax returns asserting he wasn’t a UK resident either. The result? His UK income during those years wasn’t taxed in either jurisdiction.
The ATO came calling in 2018. Amended assessments were issued, adding $3.8 million to his taxable income and applying $1.9 million in penalties. Because the normal time limits had expired, the Commissioner relied on the “evasion” exception under section 170(1) of the Income Tax Assessment Act 1936.
But the Administrative Review Tribunal didn’t agree.
It concluded that while Mr Kirtlan’s tax returns may have been inaccurate, they were not blameworthy. He had relied on long-standing advice from a competent accountant who understood the facts, considered the family’s relocation, and documented his belief that Mr Kirtlan was a non-resident. There was no dishonesty. No intent to deceive. No evasion.
As a result, the assessments were out of time and the Tribunal set them aside.
This case underscores the central role of documentation, fact-finding, and professional judgement. Residency decisions are fact-heavy, and even when the answer is wrong, the process can still be right.
From a practice perspective, the key takeaway is simple but powerful: If you take the time to get the facts, form a genuine view, and explain that view in writing to your client, your advice can be more than just guidance — it can be a shield.