Mutual allocation of joint income components can be adjusted in an additional assessment

Allocation of joint income and assets

Tax partners may freely allocate joint income components, such as taxable income from their owner-occupied property and income from a substantial interest, as well as the joint savings and investment base. Insofar as no mutual allocation has been chosen, these income and asset components are deemed to be attributable to each of them in equal shares.

Adjustments to the chosen allocation may be made until the income tax assessment for both tax partners has become final. This also includes additional assessments, protective assessments or additional protective assessments. This is subject to an exception, though, which arises if one partner’s tax assessment becomes final in response to a Supreme Court judgment. In that case, the law permits the mutual allocation to be adjusted up to six weeks after that judgment. The rationale behind this is that tax partners do not have a full insight into the detailed figures of the chosen allocation until after that final judgment. On 27 March 2026, the Supreme Court ruled that this exception also applies to situations involving collective complaints procedures.

However, a judgment handed down on 12 June 2026 prohibits adjusting the mutual allocation when the tax assessment for a particular year is decreased due to a tax loss carry-back. After all, the tax assessments for the year in which the carry-back takes place are final.

Amendment of the mutual allocation if an additional assessment is imposed

In the proceedings at hand, the question was put to the Supreme Court as to whether an adjustment of the mutual allocation is possible if an additional assessment is imposed, specifically in a situation where the joint income component has already been included in a final assessment. The case concerned a situation in which tax partners saw a reduction of their entitlement to mortgage interest relief due to an additional assessment. Hence, they wished to adjust the previously chosen allocation of the negative balance of income from their owner-occupied property.

The Arnhem-Leeuwarden Court of Appeal ruled that based on the legislative text (Article 2.17 of the Income Tax Act 2001) this is permitted, as long as the additional tax assessment has not become final. Nevertheless, the State Secretary took a different view. On appeal to the Supreme Court, he invoked the legislative history, from which it would appear that the legislature intended to allow partners to still choose a mutual allocation if an additional assessment is imposed, subject to the condition that the additional assessment was the first time when the allocable item was taken into account. However, this legislative history related to the wording of the Act as it stood prior to 2009.

Having analysed the legislative text, legislative history, legal methodology and aim and purpose, Advocate General Koopman concluded that if an additional assessment is imposed it must be possible in all cases to adjust the mutual allocation, provided that the additional assessment has not become final. In this regard, the Advocate General attaches particular value to the principle of legality under Article 104 of the Constitution, because contrary to the legislative history, the wording of the Act is clear on this point. The Supreme Court, referring to the Advocate General’s opinion, upheld the Court of Appeal’s ruling that it is possible to adjust the allocation of joint income components if an additional assessment is imposed, even where it concerns an income component that has already been included in a final assessment.

The State Secretary raised a further practical consequence: taxpayers might trigger an additional assessment by submitting an amended tax return and thus revise the full allocation of jointly held items. In this way, it might still be possible to use the legal redress in Box 3 for assessments that became final before the Christmas Judgment. However, the Supreme Court does not consider this to be a reason to interpret the law differently. What’s more, such consequences only arise if the amended tax return shows that, subject to the required legal redress in box 3, too little income tax has been paid. Only then may an additional assessment be imposed.

Source:

• Source: HR 17 July 2026, 24/01208, ECLI:NL:HR:2026:1288