I think in theory it should be an engine fitted by VW to the type of vehicle....so a Fox / Polo as fitted to late late bays should be OK. There are all the rules and exemption information one one or more of the many existing threads. But in my humble opinion, the short answer is no.
I think it would need a mot as it’s water cooled but you could read it otherwise Engine Alternative cubic capacities of the same basic engine and alternative original equipment engines are not considered to be a substantial change. If the number of cylinders in an engine is different from the original it’s likely to be, but not necessarily, the case that the current engine is not alternative original equipment. https://www.gov.uk/government/publi...toric-classic-vehicles-mot-exemption-criteria
A Subaru engine was never offered by VW as an engine option. It’s a substantial change and a MOT is required. IMO.
my fiesta is a 78 1.8 , 78 when does mine become tax and mot exempt even thou i will mot it , more interested in tax exempt , want to do a few shows this year agin with Tiny but knowing it was free to tax
MOT exemption!! The die hard true classic vw owners/enthusiasts will survive And the lesser wanna be s will Give up on maintaining the vehicle and be forced off the road and be fcuffed out of it Personally I think it’s a good plan