Current Rules
The Act of Settlement 1701 (restated by the Acts of Union) still governs succession to the Throne. (The Act does not abrogate several provisions of the Bill of Rights, which, therefore, still remain in effect.) His Majesty's Declaration of Abdication Act 1936, which provided that Edward VIII and his descendants would have no claim to the Throne, is no longer applicable, as Edward died in 1972 without issue.
Anyone ineligible to succeed is deemed "naturally dead". That individual's descendants are not also disqualified, unless they are personally ineligible.
Read more about this topic: Succession To The British Throne
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