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My child was born outside of UK while both of us (parents) holding ILR. Consequently, she got her ILR and she is in uk for the last 3 years.

Does she to apply for naturalisation (register as a child) or can i apply the british passport directly.

please advice on this. Much appreciated.

Currently, She is not a British citizen. Only British citizens may apply for British passports.

See also Citizenship application for kids born outside uk.