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You should remove your registration plate when either scrapping or selling the vehicle and you wish to keep the registration plate.
You should do this before you dispose of the vehicle. If the registration is still showing on the V5C (log book) for the vehicle when it leaves your possession, you've also lost possession of the number plate as the V5C is essentially the proof that you own the registration.
If you transfer the ownership of the car to someone else, then they will become the owner of the registration along with the vehicle. If scrapped, there's then no hope of the number plate ever being issued again. The DVLA do not re-issue plates that have previously been on vehicles.
If you are able to remove the registration using the DVLA's online service to remove a number plate, then this can be done instantly. A new/replacement V5C will be sent to you - which can take 4 to 6 weeks to arrive.
If you need to perform the removal by post, then you need to allow around 2 weeks for your request to be processed, and then the 4 to 6 weeks for the replacement V5C to arrive.
If you have no interest in keeping the registration, then you don't have to do anything and can let the number plate go with the vehicle. However, it may be first worth getting a free valuation for your plate in case you're sitting on something worth more than you expect! Back in the early 1900's, before private plates were seen as desirable items, countless registrations that today would be worth tens - if not hundreds - of thousands of pounds were simply scrapped along with the vehicles they were on. Your plate might not fetch quite those figures, but if it contains certain numbers, initials or matches a name or word, it may make it worthwhile saving it from simply being lost forever.
For further information: Retain A Registration With DVLA Retention Scheme