Under the British Nationality Act 1981, a resident of the Falkland Islands was classed as a British Dependent Territories citizen (BDTCs) unless they also had a connection with the United Kingdom (UK) itself (such as through having a UK-born parent or grandparent).

British Dependent Territories citizens were restricted in their right to enter and stay in the UK.

The new Act conferred full British citizenship on the residents of the Falkland Islands, giving them more preferential status than that of other BDTCs, including BDTCs of Gibraltar (whose British citizenship must be voluntarily applied for).

The 1983 Act was passed mainly in response to the Falklands War, which was fought between the United Kingdom and Argentina over the sovereignty of the islands.

The United Kingdom maintained that it would stand by the principle of self-determination of allowing the Falkland Islanders to decide their own destiny.