The Act of Settlement (12 & 13 Wm 3 c.2) is a piece of English legislation governing the succession to the English Crown. It was passed in 1701 to amend the the English Bill of Rights, following the death of the last child of the then Princess Anne. It provides that (in default of any further heirs of William III of England or Princess Anne only Protestant descendants of Sophia, dowager Electress and dowager Duchess of Hanover, who have not married a Roman 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 exclusionary legislation (the Alien Act of 1705), politics, and bribery to achieve it within three years under the Act of Union 1707. 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.
Sophia died before Anne, so the result of the Act was the succession of Sophia's son George in preference to many of his cousins.
As a result of the Act of Settlement, several members of the British Royal Family who have converted to Roman Catholicism or married Roman Catholics have been barred from succeeding to the Crown, though since George I no individual has been excluded from the throne on the grounds of religion.