The issue of the status of BNO holders has again raised its head in January 2015 with the lobby group BritishHongKong arguing for the right to live in the United Kingdom. The issue has been replied to by the FCO as to how they view BNO holders as follows.
Citizenship in the United Kingdom
According to the FCO there are about 3.4 million holders of BNO passports in Hong Kong alone. This status was created by the Hong Kong Act of 1985 which was to allow BNO passport holders the same status fro travel as British nationals. This was done during 1987 and 1997 and nobody was allowed to apply after that date. The status cannot be inherited so only the passport holder and not their children would had not applied would hold BNO status.
Note however that the BNO status does not give the holder the right of abode in either the UK or Hong Kong, nor are BNO holders considered UK nationals by the EU. The status only allows BNO holders the right to UK consular assistance and protection however not in Hong Kong, Macao or China. As China does not consider or recognise dual-nationality China, considers BNO holders to be Chinese citizens.
There has been a lobby for the British government to view and to consider asking countries to treat BNO passport holders like UK citizens for visa and immigration purposes. You can see the listed of visa free BNO countries however you need to email the embassy in that country to ask if they still view BNO as British. British citizenship for a BNO holder at present is only on the bases of ‘stateless’ people who have not revoked their current or older citizenship status of a country. This has been explained here.
It is still currently under discussion at this time, to allow BNO passport holders to travel visa-free in the Schengen area.
You can download the full report here