On 1 January 1983, the British Nationality Act 1981 came into force. One of the most significant changes implemented by the 1981 Act was to modify the law on British citizenship by birth in the United Kingdom (including, for nationality purposes, the Channel Islands and Isle of Man).
- Those born prior to 1983 acquired British citizenship automatically, irrespective of the parent's immigration status (except if the parents were diplomats or "enemy aliens").
- From 1983, children need an additional link to the United Kingdom over and above birthplace alone, in order to be British citizens. The law from 1983 requires that a parent be a British citizen or "settled in the United Kingdom" when the child is born. One parent who is British or "settled" is enough, although if a claim to British citizenship rests on an unmarried father, see British Citizenship-Unmarried Fathers.
- The vast majority of children born in Britain have a British citizen parent, so are unambiguously British on this basis. However, the 1981 Act has been the subject of much uninformed comment and many people believe that children born in Britain to foreign parents are excluded from British citizenship. This is not the case.
- The 1981 Act operates to exclude the British-born children of those parents either temporarily or unlawfully in Britain. It does not, and was never intended to, restrict citizenship of children of foreign parents where those parents had been admitted permanently to the United Kingdom.
 "Settled in the United Kingdom"
This is defined in the Act as "ordinarily resident in the United Kingdom without limitation as to the time in which one can remain". "Ordinary residence" is a concept of "where is home, where is one living." And admission without limitation as to time, effectively "permanent residence", refers to any of the following:
- Indefinite Leave to Remain; or
- Right of Abode; or
- Irish citizenship (due to the Common Travel Area between the United Kingdom and Republic of Ireland)
- Citizens of EU and EEA member states, plus Switzerland, in certain circumstances.
 EU, EEA and Swiss citizens
Citizens of European Union and European Economic Area member nations (Switzerland is treated as EEA from 1 June 2002) may be treated as "permanent residents" for British nationality purposes, as follows:
- between 1 January 1983 and 1 October 2000 : generally unconditionally (except in some cases if parents are Greek, Spanish or Portuguese in the first 7 years if those countries membership, unless parents held Indefinite Leave to Remain)
- between 2 October 2000 and 29 April 2006 : generally not "permanent residents" unless holding Indefinite Leave to Remain or equivalent
- from 30 April 2006 : automatic acquisition of Permanent Residence after 5 years "exercising Treaty Rights" (eg, working) in Britain.
 At the time of birth
In order for the U.K. born child to be British at birth automatically, one parent must be a British citizen or permanent resident at the time the child is born.
Many parents acquire permanent residence after the child is born. In this case, child may immediately be registered as a British citizen under section 1(3) of the British Nationality Act, provided application is made before age 18.
 Other options
 Child lives in the United Kingdom until age 10
A U.K. born child who lives in the United Kingdom until age 10 can be registered as a British citizen under section 1(4) of the British Nationality Act. There is no age limit to complete the registration, but it is subject to a "good character" requirement. It is also more difficult to evidence as time passes.
The immigration status of the child, or the parents, is irrelevant.
 British Overseas Territories
From 21 May 2002, a child born in most of the British Overseas Territories (with the exception of the special case of the Sovereign Base Areas of Cyprus) is treated as born in the United Kingdom for nationality purposes.
 Birth in Northern Ireland
Due to the law of the Republic of Ireland, every child born in Northern Ireland who is automatically a British citizen will also automatically be an Irish citizen, or "entitled to claim Irish citizenship" which amounts effectively to the same thing.
A child born in Northern Ireland may also be an Irish citizen, even if not a British citizen:
- if born before 2005; or
- if a parents has lived legally in the Republic of Ireland or Northern Ireland for 3 out of the 4 years preceding the child's birth. Legal residence in some categories, such as student, is excluded, but legal temporary residence such as a work permit or EU/EEA/Swiss status is acceptable; or
- if a parent has a permanent resident permit issued by the Republic of Ireland.