Dutch tax guidance now clarifies the HIR book-value test. Assets acquired earlier in the sale year may count when a business later sells property. This applies to assets depreciated over no more than ten years. Asset classification, book values and business records remain decisive.
Why this matters
The HIR can defer tax on a qualifying gain from a property sale. It can reduce the tax value of replacement assets and lower later depreciation. A reserve is not cash. Sale proceeds may be needed for debt, supplier invoices, wages or a move. Keep the cash forecast separate from the HIR calculation. The book-value test limits the allocation. Review long-life and non-depreciable assets separately.
Example
A company buys a new machine in February and sells its old premises in October. Both transactions fall in the same financial year. The machine is depreciated over no more than ten years. That February purchase may count in the HIR book-value test. The file should link the invoice, purchase date, commissioning date, depreciation period and HIR allocation. Buying the machine is not enough. The company must also meet the reinvestment-intention and other HIR conditions.
XTROVERSO tips
- Build one transaction file. Keep the sale contract, transfer date, proceeds, old book value and disposal gain together. Add the investment records and tax calculation.
- List investments from the sale year. Include purchases made before and after the property sale. Record the invoice date, acquisition date, commissioning date and amount.
- Separate assets by depreciation period. Identify assets depreciated over no more than ten years. Keep longer-life and non-depreciable assets separate for further review.
- Reconcile the fixed-asset register. Match each invoice to the asset record and depreciation schedule. Use the same dates and values in the annual accounts and tax return.
- Record the HIR choice and deadline. Document the chosen allocation, reinvestment intention and remaining reserve. Track the statutory three-year period from the disposal year.
- Keep tax and cash planning separate. Show sale proceeds, committed spending and HIR use on separate lines. Tax deferral does not pay a supplier invoice or wages.
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The data, sourcing, and analysis behind this article were conducted by Linda Pavan. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan before publication.
