I think you usually send it back in when you get a new one? They may return it to you with the page corners clipped. It's been a while, though, and this may have changed.
I once reported one lost and got a new one. Then I found the old one. I just kept it (I think I was supposed to send it in if found.)
Even an expired passport is a valuable document and must be treated as such.
You should never 'dispose' of it, just keep it safe.
If you EVER need a new passport even many years later you need to send in the old one to get the new one. If the old one can not be found it has to be reported as lost and a full investigation will be made before a new passport can be issued.
Officially a passport is a legal document and is the property of the 'crown' or government, you just have the use of it.
They're quite useful to prove identity - cancelled old passports.
I was mistaken for a counter-feiter or drug smuggler ( even tho' I do NOT have a tell-tale 'Widnes bun' ) but luckily whomever they were looking for did not have a parent born in Curacao in 1905. I was surprised how persuasive it was - I mean you know, how did they know ronnie biggs mum didnt come from C ? (sort of)