Nephew can apply for registration with form MN1 (not naturalisation) once he has completed 2 years of residence in the UK. This is the relevant section from the guidance
https://www.gov.uk/government/publicati ... plications
Children applying in line with their parents
Children applying in line with their parents We recognise that a number of children apply for registration under section 3(1) at the same time as their parents apply for naturalisation. Such children have usually been living in the UK with the parents and have completed a period of lawful residence.
You must normally register where:
one parent is a British citizen or about to become one through registration or naturalisation
the other parent (if involved in the child’s life) is a British citizen or settled in the UK
the child has been resident in the UK for the last 2 years - (if the child is under the age of 2 you can accept a shorter residence period, taking into account the age of the child)
the child is settled in the UK
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
If a child does not meet all of the above criteria, you must consider whether the child meets any of the other scenarios where we would normally register. If not, you must consider in line with the guidance registering exceptionally below.
Note that consent from the other parent, unless the mother has sole parental responsibility, will be needed. Otherwise the nephew can wait until he turns 18 and then apply for naturalisation with form AN instead. It will be more expensive and he will be required to show knowledge of the English language and to take teh Life in the UK exam.
All advice comes from personal research and experience and should not be regarded as professional opinion.