Preheat the oven to 350F.
Peel potatoes and halve them lengthwise.
Cut the round side thinly several times with a sharp knife almost to the bottom. Do not cut through.
Cut the shallots into eighths lengthwise.
Thinly slice the garlic.
Scatter the shallots and garlic in the bottom of a baking dish
Place the potatoes on top with the cut side facing up.
Mix sour cream, milk, horseradish, and cheese.
Season the mix with sugar, salt, and pepper.
Pour the creamy mixture over the potatoes.
Bake for 45 minutes.
Sprinkle the hazelnuts on top.
Bake for another 15 minutes until potatoes are cooked through.