British Citizenship By Descent Or Otherwise
Every British citizen is either a British citizen otherwise than by descent or a British citizen by descent.
This difference is important because the type of citizenship people have decides the way in which they can pass British citizenship on to their children who were born outside the United Kingdom.

A British citizen otherwise than by descent, can automatically pass on British citizenship to a child born outside the UK. You can be a British Citizen otherwise than by descent by:

Birth;
Registration;
Naturalisation;
Adoption.
A British citizen by descent is a person born outside the UK and is acquired if one or both parents are British citizens. This means that you cannot automatically pass on British citizenship to any child who is born abroad. You are a British citizen by descent if:

You are born outside the UK to a parent who was a British citizen at the time;
It does not matter whether the birth took place before or after 1 January 1983 as long as a child who was born before that date became a British citizen on that date;
On 31 December 1982, he or she was a citizen of the United Kingdom and Colonies through:
his or her own birth, or
a parent's or a grandparent's birth,
legal adoption
naturalisation
registration
You lived in the UK while a citizen of the United Kingdom and Colonies for five years at any time before 1 January 1983, and was not subject to restrictions under the immigration laws at the end of that five year period.
You are a citizen of the United Kingdom and Colonies by connection with the Falkland Islands and Dependencies (i.e. South Georgia and the South Sandwich Islands).

 

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http://www.britainusa.com/sections/inde ... =41001&d=1