Paying for care from abroad: pensions, tax and money transfers

Costs & funding · 4 min read · Last updated 30 October 2026

Care home fees abroad are usually paid from your relative's own income and savings. That raises practical questions: how pensions are paid overseas, which country taxes the income, and how fees are paid in another currency. This guide uses UK government guidance as an example, because many of our readers have UK pensions. Other countries have their own rules, and a tax adviser who knows both countries is the best source of advice.

Start with the budget

Get written quotes from the homes you are considering and compare them using our guide to understanding care costs. Then list your relative's regular income (pensions, rents, annuities) and savings, and work out how many years of fees they can cover, allowing for price rises. Check contracts and fees for what is included.

The UK State Pension abroad

According to GOV.UK, you can claim the UK State Pension while living abroad if you have paid enough UK National Insurance contributions. You must be within four months of State Pension age to claim, and you claim through the International Pension Centre. A few practical points from the same guidance:

  • You must choose one country for payment. You cannot be paid in one country for part of the year and another for the rest.
  • The pension can be paid into a bank in the country where you live, or into a UK bank or building society. The account can be in your name, a joint account or, with their permission, someone else's.
  • For an overseas account you need an IBAN and BIC, or a bank code and account number.
  • Payments are converted to local currency at the exchange rate on the conversion date, with a 0.39% conversion charge.
  • Payments are made every four or 13 weeks.

GOV.UK has separate pages on how the pension is affected by where you live, including yearly increases, so check those for current rules.

Tax in two countries

GOV.UK explains that you may be taxed on your pension by both the country you live in and the UK. You pay UK tax if you receive a pension from a UK provider or if you are classed as UK resident for tax purposes, and you need to tell HMRC if you move abroad.

You may not have to pay twice if the country you live in has a double taxation agreement with the UK. Each agreement sets which country taxes the income, where you claim relief and how much. Depending on the agreement, relief may be given before tax is taken or as a refund afterwards. Most UK government pensions, such as civil service pensions, are normally taxed only in the UK. To claim relief, you usually send a form to the tax authority in the country where you live, which confirms your eligibility and either returns it to you or forwards it to HMRC.

Paying the home

  • Ask the home how it takes payment (bank transfer, direct debit, card) and in which currency.
  • Compare bank exchange rates and fees with those of a specialist transfer provider, since regular transfers add up.
  • Consider setting up a local bank account for your relative, and check who is allowed to operate it. Banks often need a power of attorney that they accept. See legal documents for care abroad.
  • Ask what happens to fees paid in advance if your relative leaves or dies.
  • Keep records of every payment, and agree in writing who pays what if siblings share the cost.

Is public help available?

In many Mediterranean countries, public support for care homes depends on residence, assessment and sometimes waiting periods, so new arrivals often pay privately at first. See our country guides for Spain, Portugal, France, Italy, Greece and Turkey, and healthcare cover abroad.

Frequently asked questions

Can my relative keep their UK State Pension if they move abroad?

According to GOV.UK, you can claim the UK State Pension abroad if you have paid enough National Insurance contributions. You claim through the International Pension Centre within four months of State Pension age. Check the GOV.UK pages on how the pension is affected for increases.

Will my relative be taxed twice?

They may be taxed in both countries, but a double taxation agreement can prevent that. Each agreement decides which country taxes the income and how relief is claimed. A tax adviser can confirm what applies.

Which currency should the fees be paid in?

Ask the home. Most take local currency. Compare exchange rates and fees across your bank and transfer providers, since regular payments add up.

Sources and further reading

This guide is general information only, compiled from the public sources listed above as of the date shown. It is not legal, medical, tax, financial or care advice, and we cannot guarantee that it is complete, accurate or up to date. Rules, thresholds and prices change and differ by country and region, and some sources describe other countries' rules as examples. Check details with the authorities and care homes named, and take professional advice for your own situation before you act. If you spot an error, please email [email protected] and we will correct it.