Recent press coverage has touched on how overseas membership works - after the Financial Times reported that lawyers and accountants are now advising their tax-exile clients to quit their London clubs. This merely touches the surface of the long-term evolution of how clubs in the capital have accommodated overseas membership.
Georgian-era clubs
The clubs of Georgian London had a very simple way of accommodating members spending time overseas: they didn’t. There were several reasons for this.
Firstly, the very idea of “clubbing together” in an 18th century context meant being physically present together. This was particularly true in an era when clubs were more intimate, with only a few dozen - or at most a few hundred - members; and more emphasis on those members all turning up on designated club nights.
Secondly, this was tempered by the seasonal nature of London society at the time - many of whose members were provinicially based, and would only relocate to London for “the season” (which broadly corresponded with the parliamentary session), meaning that club life itself was highly seasonal - and if members returned to the British or Irish provinces for much of the year, this was quite normal. It was therefore equally normal for members of London clubs to lead busy provincial lives for parts of the year (and indeed to belong to provincial clubs, without any tension with membership of their London clubs), and for the London clubs to make little or no accommodation for this. (Dr. Johnson’s ‘The Club’ of the eighteenth century would relocate to The Flask tavern in Highgate, outside London, to avoid the stench of the capital’s open sewers in summer - this was about as far as the city’s establishments would go.)
The “grand tour” focusing on Italy and Greece, a formative experience for young aristocrats in early Georgian clubs, played less of a role here than might be thought, since the individual was often still a teenager, and might not be elected to their London club(s) until after they had returned home.
The “abroad” list
These perspectives began to evolve during the Victorian era, particularly as attitudes changed towards empire and travel. It became less uncommon for members to spend significant time abroad, whether for military or civil service, or simply for travel.
Travel in the Victorian era meant a prolonged absence. At the start of the 19th century, a ship journey across the Atlantic could take 25 to 30 days each way. (By the end of the century, this had been shortened to 5 days.) Similarly, the sea voyage from London to Bombay took 4 to 6 months at the start of the century, sailing around the Cape of Good Hope. With faster ships and a more direct route via the Suez Canal, this had been shortened to about 3 weeks by the end of the century. Either way, absences abroad could easily last months, or even years, in the 19th century.
Accordingly, London clubs began to recognise this for the first time. They did this through the “abroad list.”
A member on the abroad list effectively had their membership paused whilst they were abroad. They were still recognised as having been a duly elected member. But since they would not be returning to the Club for some considerable time - often years - they would not have to pay a subscription during their time abroad.
The abroad lists were relatively small and uncontroversial: a club of 700 members might have only half-a-dozen to a dozen members on the abroad list. Each individual would verifiably be based overseas during that time, for instance to hold a diplomatic role on the other side of the planet. Not all members spending time abroad were on the abroad list; for instance, if their role required frequent trips to Paris, they would still remain a member on ‘regular’ terms, on the assumption that they might still show up from time to time. The abroad list was for protracted absences from club life.
The world wars
In the 20th century, both world wars had a dramatic effect on the internationalisation of club life. On the one hand, London club members serving in the armed forces spent long stints abroad, not visiting their clubs at home. On the other hand, those who were posted in countries where the British had set up large numbers of clubs - including India, Kenya, Singapore and South Africa - could be exposed to the full breadth and scope of clubs abroad.
Meanwhile, at home, it was quite common for London clubs to extend some sort of wartime hospitality towards allied personnel staying in London. This could take the form of developing new links with officers of allied armies such as those of France and the USA. It could take the form of deepening existing links with Empire and Commonwealth forces stationed in London. And it could take the form of exiled allied forces such as the Free French, Belgians and Poles each setting up their own London clubs, often with considerable official support from the UK government, and patronage from well-connected individuals.
Reciprocation
The result of all this was the popularisation of reciprocation after the war. Reciprocation between clubs had existed - on a very limited scale - since the 1870s. But it was when members returned home from the Second World War, with tales of the clubs they had seen abroad, that it really caught the imagination of their fellow members. (At some point I will revisit in more detail how 1950 seems to have been the year when it really took off - something that has become clearer to me thanks to a tranche of historic documents recently viewed.)
Of course, reciprocation stood as a complement and contrast to the idea of an ‘abroad list.’ A member on the ‘abroad list’ was likely to spend several months abroad, so the original form of reciprocation could resemble more of a temporary residency, especially if the reciprocal member was temporarily accommodated in their reciprocal club on arrival, until they found longer-term lodgings in their new city.
The evolution of overseas membership
As travel became quicker in the 20th century, the assumptions behind the ‘abroad list’ were called into question. People were no longer relocating to another country for six months or two years at a time, they were instead popping over for a fortnight’s holiday.
These trends were further exacerbated by developments in the 1950s and 1960s, ranging from the “Winds of Change” around decolonisation (which also meant that there was no longer a sizeable contingent of British colonial civil servants being deployed abroad for years on end), to the explosion in more affordable holiday provision. There was also increasing globalisation more generally, with members often relocating abroad for years at a time, even if they intended to return to their ‘home’ city after a few years.
All this made the ‘abroad list’ model less tenable, and it existed side-by-side with the notion that members overseas may exercise more limited reciprocal privileges. Crucially, reciprocation was typically deemed to be time-limited, and was never intended to be de facto membership of another club for a protracted period of time, but a limited number of visits in any year. In this environment, it became common for 30 days a year to be the stipulated cap on the number of visiting days each year - though 10, or even 5 or 2 are not unheard of.
It is this 1950s and 1960s shift which marks how we think of both reciprocation, and overseas membership, today.
Since the late 19th century, clubs had offered discounts for country membership; so the rise in members overseas naturally led to pressure from members for further discounts which recognised the further reduced presence of overseas members in their home club.
How clubs structure these discounts varies considerably from one establishment to another. Some clubs - particularly the cheaper ones - do not make the distinction at all, and simply charge a flat fee, on the premise that membership there is still cheaper than many other clubs to begin with. Other clubs have a simple, flat overseas rate, which is reduced from the full rate. Other clubs have “zoning” approaches to the world (the Reform Club, for instance, charges the same subscription for the rest of Europe as the UK, and with a separate US rate that is higher than their international rate, but lower than their UK/Europe rate). And other clubs have more complicated structures, for instance in reducing the overseas subscription with the number of years spent abroad.
The tests applied by clubs in qualifying members for “overseas” status also vary considerably. Different clubs might treat the Channel Islands and the Isle of Man as “home” or “abroad”, for instance. Some clubs stipulate a minimum period of time living overseas. Others make overseas membership dependent on whether or not members still have a home in the UK.
Overseas membership still remains relatively unusual in historic London clubs, where a proportion of around 10% is not unusual. It is most common in clubs themed around educational background (whether from school or university), where it is more common for those sharing the membership characteristics to have moved abroad - sometimes 30-40% of members. For internationally-themed clubs, overseas membership can make up over half of members. It is also fairly common in military-themed clubs. And it is very common in the newer proprietary clubs, particularly those with an emphasis on recruiting HNWIs and UHNWIs, who live a global life.
My last book noted how subscriptions are a topic of heated debate at the best of times, but how concessions in partiular can become a battlefield for member arguments:
“There are always gripes about subscriptions – country members piping up that members living in town really should pay more, while town members bemoan how cheap the membership is for those living in the country, even though they are seen in the Club more frequently than anyone else. Assorted tax exiles try to argue that their main home in Jersey or the Isle of Man really should count as ‘overseas’ and that the Chelsea address is ‘just a pied-à-terre’.”
Tax implications
Quite understandably, clubs have long been utterly disinterested in the tax affairs of their members - unless the club’s membership structures do something to prompt mass-resignations, such as adversely affect a member’s tax status. However, this is precisely what the Financial Times suggests, recently reporting that some London clubs are reconsidering their overseas membership structures, after recent legal and tax advice suggested that in certain circumstances, in the aftermath of the abolition of “non-dom” status, belonging to a London club could be seen under HMRC’s Statutory Residence Test to make an overseas resident eligible to pay tax in the UK. Certainly, the FT reports that, “one club has raised the prospect of offering short-term memberships for specific durations including 90 days.”
Yet recent analysis from Mondaq casts doubt on the extent of the concern expressed in the Financial Times. Christopher Groves and Ed Cubitt argue that under the Statutory Residence Test which has existed since 2013, the “sufficient ties” test which considers factors like club memberships only comes into play in a limited number of borderline cases, after other tests have not been met; and only for individuals with no UK residence and no residence abroad, who are staying in clubs; and only with UK clubs offering accommodation to their overseas members for 91 or more days a year. They add, “For private members clubs which do not offer any accommodation, the risk simply doesn't exist.”
It is likely, therefore, that the coming years will see a slight amendment in the availability by UK clubs of accommodation to overseas members, in curtailing accommodation availability for more than 90 days a year. But Groves and Cubitt’s analysis would make it seem doubtful that changing tax rules will drastically change overseas membership offerings, as the Financial Times reporting suggests.
Overseas membership today
For most members, club membership is not about tax status. Overseas members occupy a distinctive place in clubs. Their visits are necessarily limited throughout the year - though the nature of compressing things together during a visit means they can often be highly active in their club engagement when visiting town, especially if they are staying at their club, and having at least two meals a day there. They bring a very welcome outside perspective to club tables, often sharing insights and gossip not available to the ‘home’ members. And their visits are always an event.
(Obligatory disclaimer that my opinions above in charting the context of the history of overseas membership do not constitute formal tax advice, and that you should always seek formal advice.)
You can view the full and varied backlog of Clubland Substack articles, by clicking on the index below.
Index
Articles are centred around several distinct strands, so the below contains links to the main pieces, sorted by theme.