Legal framework for exchange: Types of international agreement: The EU Directive on Administrative Cooperation in Tax
As a Member State of the European Union, the UK is party to the Directive on Administrative Cooperation in the Field of Taxation (2011/16/EU). It is known commonly as the DAC, or sometimes in Europe as the ACD.
The DAC provides for a wide range of methods and practices of exchange of information, and is designed to facilitate and encourage Member States to cooperate as far as possible on direct tax administration and enforcement. This includes exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, and simultaneous tax examinations. Simultaneous tax examinations, and other forms of closer working, can in some circumstances be partly funded by the EU. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
The DAC is brought into UK law through the European Administrative Co-Operation (Taxation) Regulations 2012 (SI 2012/3062), made under the powers in ECA72. These Regulations are ambulatory, so can accommodate changes to the Directive to the exftent that they are procedural or otherwise rely on action by HMRC. IEIM210420 has details of the various amendments that have been made to the DAC.