Figures relate to tax year 2026 (US) · 2026-27 (UK)
At some point the money starts flowing the other way. Elderly parents need help, and you are the one with the salary.
Doing that across an ocean touches both tax systems, and almost none of it works the way people assume.
There is a credit you may be able to claim, a form you may have to file, and a trap in the direction nobody expects.
Key takeaways
- A parent can be a US dependent without living with you.
- They must be a citizen, resident or resident of a neighbouring country.
- A British parent therefore rarely qualifies.
- Medical costs you pay for a parent may still be deductible.
- Money a parent sends you can need reporting, not taxing.
- The reporting threshold for a foreign gift is $100,000.
- An American parent abroad keeps filing however old they are.
- Britain gives no tax relief for supporting a relative.
Can you claim elderly parents as dependents?
Potentially, and the residence test usually stops it. According to IRS guidance on dependents, a qualifying relative must be a United States citizen, national or resident, or a resident of Canada or Mexico. A British parent who is none of those cannot be claimed.
Our guide to head of household for expats covers the related status.
An American parent living in Britain is a different matter.
What if your elderly parents are American?
Then the residence test is satisfied and the ordinary rules apply. You need to provide over half their support and their gross income must fall below a low threshold. Social security is often excluded from that income figure, which helps more than people expect.
Our guide to social security and the state pension covers the payments.
They do not need to live in your household.
What is the credit worth?
A dependent who is not a child attracts the credit for other dependents rather than the child credit, worth $500 for 2025. It is non-refundable, so somebody claiming the earnings exclusion with no American tax to pay gets nothing from it.
Our guide to Form 2555 and the exclusion covers the relief that blocks it.
The credit and the exclusion work against each other.
Which way the money moves
| Situation | US treatment | UK treatment |
|---|---|---|
| You support a British parent | No dependent claim | No relief |
| You support an American parent | Possible $500 credit | No relief |
| You pay a parent's medical bills | Possibly deductible | No relief |
| A parent gives you money | Report over $100,000 | Not income |
| You inherit from a parent | Report, not taxed | Estate pays |
| A parent lives with you | No UK relief | No UK relief |
Does Britain give any relief?
None for supporting a relative, which surprises Americans used to dependents. The British system has no equivalent of a dependent exemption, and carer's allowance is a benefit for the carer rather than a tax relief. Support is simply spending here.
Our guide to UK state benefits and US tax covers allowances.
Carer's allowance is itself taxable income.
Can you deduct medical costs you pay?
Sometimes, and the rule is more generous than the dependent one. Medical expenses paid for somebody who would be your dependent but for the income test can count towards your own deduction. The residence requirement still applies.
Our guide to health insurance for expats covers cover abroad.
Only costs above a percentage of income are deductible.
A worked example
Take an illustrative case. An American in Bristol sends several hundred pounds a month to her mother in Ohio.
Her mother is American with only a modest social security income, so the support test is met.
The dependent credit is available in principle, and worth nothing in practice because the exclusion leaves no American tax to reduce.
Switching to the foreign tax credit for that year would leave a small liability the $500 could actually offset.
What if a parent sends you money?
That direction is the one with a penalty attached. A gift from a foreign person above a hundred thousand dollars in a year needs reporting, and the filing is informational rather than a tax charge. People miss it precisely because no tax is due.
Our guide to Form 3520 and foreign gifts covers the report.
The penalty is a percentage of the amount received.
Is a gift from a parent taxable?
Not to you, in either country. America taxes gifts to the giver rather than the receiver, and Britain does not tax gifts as income at all. So a parent helping with a house deposit creates a reporting question and not a tax bill.
Our guide to US gift tax for expats covers the giving side.
An American parent giving may have their own filing.
Does a British parent have a gift problem?
They have a British inheritance tax question rather than a gift tax one. A gift made more than seven years before death generally falls out of their estate, and one made later may not. That is their planning rather than yours.
Our guide to UK inheritance tax and the US system covers estates.
Encourage them to take their own advice.
Do elderly parents keep filing in America?
An American parent does, at any age, if their income crosses the threshold. Retirement changes nothing about citizenship based taxation. Plenty of elderly Americans abroad have quietly stopped filing and do not realise they should not have.
Our guide to US filing thresholds for expats covers the figures.
The threshold rises slightly once they reach 65.
What if they stopped years ago?
There is a route back, and it works for an elderly person as well as anybody. The catch-up procedures cover somebody who genuinely did not know, and a retired person with modest income usually owes nothing once the returns are filed.
Our guide to streamlined eligibility covers the route.
It is far better done while they can still sign.
Can you file on their behalf?
With authority, yes, and that authority has to exist before they lose capacity. A power of attorney filed with the IRS lets you deal with their affairs, and a British lasting power of attorney does not reach the American system.
Our guide to IRS power of attorney covers the form.
Put both arrangements in place at the same time.
What if elderly parents lose capacity?
Then somebody has to step in formally, and the American side needs its own notice. A fiduciary acting for an incapacitated person tells the IRS so that correspondence reaches the right place. Without it the letters keep going to them.
Our guide to Form 56 and fiduciary notices covers the notice.
A court order or a registered power is the evidence.
What about a parent's UK property?
If they give it to you, the gift is outside your income but may sit in their estate for seven years. If you inherit it, you get a cost base at the value at death. Moving in to care for them raises its own questions.
Our guide to inheriting UK property covers the inheritance.
A gift of a house they still live in is rarely effective.
Does care home funding affect anything?
Local authority means testing looks at their assets rather than yours, and money you give them becomes their asset. So supporting a parent can affect what the state contributes. That is a care question with a tax shadow.
Our guide to long-term residence and IHT covers the estate position.
Take care advice before transferring anything large.
Should you bring elderly parents to Britain?
Moving them here makes them British resident and taxable on worldwide income, which for an American parent means both systems at once. The immigration route is separate and often harder than the tax. Think about both before anybody packs.
Our guide to retiring to the UK covers moving here later in life.
An American pension taxed here can cost more than it did there.
What happens when a parent dies?
You move from supporting them to administering an estate, and the reporting changes with it. An inheritance is not income to you, and it may still need reporting if it comes from abroad and crosses the threshold.
Our guide to a US executor and a UK estate covers the administration.
The year of death brings a final personal return.
What records do elderly parents need?
Proof of what you sent and when, their income figures for each year, receipts for medical costs, and any authority document. Those four support a dependent claim or a medical deduction, both of which the IRS does question.
Our guide to exchange rates on a US return covers conversion.
Bank transfers evidence support better than cash.
Do elderly parents affect your filing status?
A qualifying parent can make you head of household even if they live elsewhere, which is unusual. That status gives a better rate band than filing separately. The same residence test still has to be met first.
Our guide to the US-UK tax treaty covers a related point.
A parent is the one dependent who need not live with you.
What counts as supporting elderly parents?
Housing, food, medical care, transport and similar costs, measured against everything spent on them from all sources. Their own social security counts as support they provide themselves. So you need to outspend the total of everyone else.
Our guide to US tax deadlines for expats covers a related point.
Several siblings sharing the cost can split the claim.
Can siblings share elderly parents?
Only one of you claims in any year, and a multiple support agreement decides who. Each contributor has to provide more than a tenth and the group together more than half. Rotating it between siblings year by year is common.
Our guide to amending a US return covers fixing a double claim.
Two siblings claiming the same parent triggers a notice.
Do elderly parents' pensions matter?
It counts towards their gross income, which is the test most claims fail. A British state pension and a small occupational one together can exceed the threshold easily. Work out the figure before assuming anything.
Our guide to UK pensions and US tax covers the schemes.
Social security is often excluded, other pensions are not.
What about travel costs to visit them?
Flights to see a parent are personal spending in both countries, however necessary they feel. There is no relief for them anywhere. Travel for their medical treatment can occasionally count towards a medical deduction.
Our guide to the UK tax year difference covers the two calendars.
Keep medical travel receipts separate from holiday ones.
Should money go to them or to a bill?
Paying a care home or a hospital directly keeps the paper trail clean and helps a medical deduction. Sending cash to a parent who then pays is harder to evidence. The route matters more than the amount.
Our guide to paying the IRS from the UK covers cross-border payments.
Pay the provider where you reasonably can.
Does a joint account help?
It makes paying bills easier and creates a reporting problem. An account you can sign on is reportable by you, even if the money is theirs. Many people add themselves to a parent's account without realising that.
Our guide to FBAR signature authority covers signature authority.
Signature authority alone is enough to trigger it.
Do elderly parents change your own estate plan?
Receiving an inheritance adds to your own estate, which for somebody long resident here brings British inheritance tax into view. A sum passing straight to your children instead can be worth discussing with the parent while they can still decide.
Our guide to wills for Americans in the UK covers the planning.
That conversation is easier years before it matters.
What if they own property in both countries?
Then two estates have to be administered and two sets of rules apply to the same person. A British house and an American brokerage account are taxed by different authorities on death. An executor needs advice in both places.
Our guide to US estate tax for UK investors covers American assets.
Make sure a will covers the assets in each country.
When should you get advice?
Before capacity becomes a question, and before any large transfer. Those are the two moments where the options narrow sharply. Everything else can be sorted out at leisure with good records.
Our guide to choosing a US-UK tax accountant covers finding help.
A single conversation early saves years of difficulty, and it costs far less than unwinding a problem later.
How to handle support for elderly parents
- Establish whether the parent is American, resident or neither.
- Check the support and income tests if they are American.
- Work out whether you have any US tax for the credit to reduce.
- Keep receipts for any medical costs you pay directly.
- Count any money they send you against the reporting threshold.
- Check whether they are still filing their own American returns.
- Put a power of attorney in place on both sides early.
- Record every transfer with its date and exchange rate.
Mistakes and penalties we see with elderly parents
The first is claiming a British parent as a dependent, which the residence test does not allow.
The second is receiving a large gift from a parent abroad and never filing the informational return.
The third is discovering an American parent stopped filing a decade ago, after they can no longer sign anything.
The fourth is assuming a British lasting power of attorney lets you deal with the IRS, which it does not.
How US UK Tax Accountants helps
We look at the direction of the money first, because support flowing out is a possible credit and money flowing in is a possible penalty.
Then we check whether the parent's own filings are current. Our US federal returns service covers both.
If you are supporting a parent across the Atlantic, get in touch.
Last reviewed 4 November 2026. This article is general information and not personal tax advice, and family circumstances vary widely.
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Official guidance from the IRS, FinCEN and GOV.UK. Thresholds and rates on those pages are updated annually — check the current tax year before relying on a figure.
