1) does this mean I can apply for ILR in October 2014 (28 days before my current visa expires)?
2) when applying for ILR would I need to calculate my absences from the uk? if so, how long am I allowed to have been outside the country?
3) once I have ILR, am I correct in assuming that I qualify to apply for naturalisation immediately as I have been living in the uk since 2010?
1) Yes, you can apply for ILR 28 days before your FLR(M) expires.
2) No, you do not need to calculate absences from the UK for ILR (but you do for citizenship). You just need to show that you and your spouse have lived together at the same address for the entire 2 years... by way of providing 6 official documents in both your names, addressed to you at the same address, spread evenly over the 2 years (1 document per each 4-month period, or 2 documents per period, one in each name, if they are not jointly addressed).
3) Yes, you can apply for naturalisation immediately after receiving ILR as long as you meet the requirements:
- you can show you were in the UK exactly 3 years prior to your naturalisation application date
- you have not been outside the UK for more than 270 days in the 3 years prior to applying for naturalisation, with no more than 90 of those days in the last 12 months before applying (you do not count any days that you left or returned to the UK, so if you went on holiday from a Monday to a Friday, that's 3 full days outside the UK - Tues to Thurs).
- you have no unspent criminal convictions
- you are still married to your UK partner
- you meet the good character requirement
If you can't meet the requirements as soon as you get ILR, you just have to wait until you do meet them.