From the guidance
https://www.gov.uk/government/publicati ... cretionary
This section covers your oldest daughter, born outside of the UK, but lived in the UK lawfully for 10 years. No need for you to have ILR to apply for her al long as your immigration status is regular
Children who have lived in the UK for more than 10 years
If a child has lived in the UK for more than 10 years you must normally register the child if the expectations below about lawful residence and parents’ status are met, in addition to the good character requirement. 10 years is the length of time required for a child born here to have lived in the UK to have an entitlement to register under section 1(4) of the British Nationality Act 1981. As such, 10 years constitutes a significant period of residence for a child to demonstrate a strong connection with the UK. If a child has fewer than 10 years’ residence in the UK, you must consider them against the criteria for registering exceptionally below.
You must normally register if a child has lived in the UK for more than 10 years and:
the child is in the UK lawfully
the parents have regularised their own status
where necessary both parents consent to the registration or any objections by the non-applying parent are ill founded
there is no reason to refuse on character grounds
However, each case must be considered on its own merits, weighing up arguments made about the individual child’s best interests, and taking into account the normal expectations below.
Where a child has been in the UK fewer than 10 years, it may nevertheless still be appropriate to register – see the section on registering exceptionally below.
Expectations for a child who has lived in the UK for 10 years
Compliance with immigration law – child who has lived in the UK for 10 years
We would normally expect the child to be lawfully in the UK. To grant citizenship to a child who is here unlawfully could potentially undermine the immigration system, as it could be viewed as rewarding or incentivising non-compliance. However, we recognise that there may be cases where the unlawfulness was beyond the child’s control.
If the child is not here lawfully you must consider whether there are exceptional reasons to grant, in which the reasons put forward for granting citizenship outweigh the need to promote compliance with the immigration law. In considering this, you must take into account the age of the child, the connections they have established with the UK, their length of residence, and their particular circumstances. (For example, it may be appropriate to register an older minor who has lived in the UK since they were a baby, has completed all their schooling in the UK and has demonstrated very strong personal connections with the UK through relationships and involvement in community groups.)
For younger children (who are not in local authority care) who are in the UK unlawfully, you must not normally grant the application, unless there are exceptionally compelling grounds that justify moving the child from being here unlawfully to becoming a British citizen. Such younger children are not usually at a critical point in their lives where they might lose out on opportunities.
Parents’ status - child who has lived in the UK for 10 years
We would normally expect the child’s parents to be here lawfully, as this means that the family’s future is likely to be in the UK.
It may be argued that for a child who has lived most of their life in the UK and formed connections here, it is in their best interests to secure their status. However, this is more apparent for older minors who have formed their own independent connections (which they would expect to continue were the parents to leave the UK). A younger child’s future, however, will normally follow that of the parents, and so their future intentions may not clearly lie in the UK. The best interests of a younger child could be to follow their parents’ residence and status.
In the case of an older teenager, you must therefore consider whether the arguments put forward about the child’s interests and strength of connection outweigh the fact that their parents are not here lawfully. If so, and the other expectations are met, you may grant the application.
For younger children, if the parent’s status in the UK is precarious (for example, if they are here unlawfully, or are subject to removal action), the child’s future may not lie in the UK. You must weigh up whether the child’s circumstances are such that there are significant grounds to register, which outweigh the fact that their future may not be in the UK.
For youngest daughter, parents are expected to hold ILR
Requirements for registration under section 1(3)
Children are entitled to registration under section 1(3) of the British Nationality Act 1981 if:
they were born in the UK
they were not British citizens at birth because at the time neither parent was a British citizen or settled
while they are minors either of the parents has since become a British citizen or settled in the UK
they are under the age of 18 on the date the application is received
they are of good character if aged 10 or over
Registration under section 1(3) gives British citizenship otherwise than by descent.
Evidence required under section 1(3)
Applications under section 1(3) must be supported by the following evidence, if relevant:
child’s full UK birth certificate showing birth in the UK and the parents’ details
evidence of parent’s British citizenship since the child’s birth, such as:
a British passport
a naturalisation certificate
a registration certificate
evidence of parent’s settled status since the child’s birth, such as one of the following:
an indefinite leave to remain (ILR) stamp in a passport
a Home Office letter
a no time limit stamp
a biometric residence permit (BRP) confirming ILR
a unique application number (UAN) confirming the parent has been granted ILR (also known as settled status) under the EU Settlement Scheme
evidence the parent holds a Withdrawal Agreement right to reside in the UK permanently on the basis of qualifying activity for the relevant period
a marriage certificate if:
the parent on whom the claim is based became a British citizen or settled in the UK after the child was born
the child was born prior to 1 July 2006 to a father who is a British citizen or settled in the UK. (If the child was born before 1 July 2006 and the parents were not married, see the guidance on Children of British Parents)
To keep it simple I would suggest to apply for both daughters after your ILR applications have had a positive outcome.
All advice comes from personal research and experience and should not be regarded as professional opinion.
