if i don't fit a chimney liner but close off chimney is it legal?

Not illegal to seal off your fire place but as above you would need to fit air vents to allow your chimney to ventilate and also bear in mind if your appliance is pumping fumes from your flue into next doors, their appliance (if applicable) will be doing the same into your flue.

I am not sure on the legalities, as yours stack is adjoining next doors, but I will quote, some one a couple of weeks ago had a similar problem as you, his stack adjoins onto a council house, he is being charged £600 by the council to rebuild the top 3 courses of brick, rebuild the top part of the dividing wall and repointing. He was going to get a builder friend to just repair his part of the stack, but apparently this is a no from the council, so worth checking first. If you are going to cap of your part of stack, you need to install air bricks top and bottom.

Chimney Care & repair are correct !!!! Blocking of your chimney is fine, However, please consider the vis a vis risks !!! I.E. Your neighbours appliances spilling fumess through the required air vents of your newely capped off chimney ! !