Yes, the D3 4.2 has a timing belt - although it shares more in common with the late B6 S4 engine than the D2 V8 it did have a belt whereas the S4 was the first to use a timing chain.
You should be changing every 80k or 5years.
Full timing belt, tensioner kit and coolant pump with auxiliary belt is between £400-£500 Inc Vat etc. Dealers would be about £750 I think
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