The Act of Settlement is a piece of English legislation governing the succession to the English Crown. It was passed in 1701. It provides that only Protestant descendants of Sophia, Electress of Hanover, who have not, furthermore, married a Catholic, can succeed to the English Crown. In addition, it specifies that it is for Parliament to determine who should succeed to the throne, not the monarch.
This act was, in many ways, the major cause of the union of Scotland and England to form the Kingdom of Great Britain. The Parliament of Scotland was not happy with the Act of Settlement and, in response, passed the Act of Security in 1704, which gave them the right to choose their own successor to Queen Anne. This would have created a fully independent Scotland rather than the partially independent nation which had resulted from the Union of the Crowns a hundred years before. As a result, the Parliament of England decided that full union of the two Parliaments and nations was essential before Anne's death and used a combination of discriminatory legislation, the Alien Act of 1705, politics, and bribery to achieve it within three years. This was in marked contrast to the four attempts at political union between 1606 and 1689 which all failed owing to a lack of political will.
By virtue of Article II of the Treaty of Union, which defined the succession to the British Crown, the Act of Settlement became, in effect, part of Scots Law.
As a result of the Act of Settlement, several members of the British Royal Family who have converted to Roman Catholicism or married Catholics have been barred from their place in the line of succession. This law has in recent times been frequently been attacked as anti-Catholic and religiously discriminatory. The Guardian newspaper is in the process of launching a legal challenge to the legislation, based on the European Convention on Human Rights and the Human Rights Act 1998.
Any repeal of the law could lead to an anomally with the status of the Church of England as the established church in England, since a Roman Catholic monarch would be Supreme Governor of the Church of England, something which had not happened since King James II of England. In practice, it might make little difference, since the monarch is required to act on the advice of the Prime Minister, for example in the appointment of senior bishops, and British Prime Ministers have often not been members of the Anglican Church.