How to spot, and avoid, "too good to be true" tax schemes

We’ve all heard the saying, if it sounds too good to be true, it probably is. Sadly, when it comes to investing, that old phrase has claimed more victims than we’d like to think.

The BBC recently highlighted how a group of former Premier League footballers lost millions after being lured into unregulated tax schemes. What was pitched as a smart way to lower their tax bills and grow their wealth turned out to be a financial disaster.

So how do you avoid falling into the same trap?

What Makes These Schemes Tempting

On the surface, the pitch can sound persuasive:

• Reduce your tax bill
• Generate attractive returns
• Gain access to ‘exclusive’ projects (like film production or property)

It looks like a win-win. Why pay tax when you could put that money into something that grows your wealth instead?

But what gets glossed over are the risks hiding in the small print.

The Risks Beneath the Promise

• Unregulated territory: If the investment goes wrong, you’re on your own
• Complex, confusing structures: Designed to create paper tax advantages, not real profits
• Loss of control: Money is often locked away for years, with little flexibility
• HMRC challenges: Even if you think everything is above board, tax authorities may see it very differently, leaving you with surprise bills and penalties

For the footballers, the result was devastating: massive losses, years of legal arguments, and their personal finances splashed across the headlines.

How We Think About It at Carbon

At Carbon, we take a very different view. Chasing shortcuts or relying on loopholes is not a safe way to build lasting wealth. Instead, we believe in an approach that is open, evidence-based, and designed to deliver peace of mind as well as financial confidence.

Our advice to clients is simple:

• Ask questions until the explanation makes sense to you in plain English
• Don’t be dazzled by “exclusive” opportunities – the best investments don’t need flashy sales tactics
• Seek independent, regulated advice before committing your money
• Focus on what’s proven to work: patient, disciplined investing backed by transparency and trust

A Practical Rule to Remember

When faced with an offer that promises high returns and lower taxes with little to no risk, take a step back and ask yourself: Does this seem too good to be true? If it does, that’s probably the answer.

Ready to Talk?

At Carbon, we’re here to bring clarity, reassurance, and an investment approach that genuinely works for the long term. Get in touch with us today, and let’s focus on building the type of financial security that never puts you at risk of the “too good to be true” trap.

Important Note

This article is provided for information purposes only and should not be regarded as financial advice. Decisions should not be made based on this material without first consulting a qualified financial planner who understands your personal circumstances. Information is based on sources believed to be reliable, but accuracy cannot be guaranteed. This content is directed primarily at UK residents.