Preheat your oven to 350°F (175°C) and line a cupcake pan with paper liners.

Cream together the softened butter and granulated sugar in a large bowl until the mixture becomes light and fluffy.

Add the eggs, one at a time, making sure each is fully incorporated before adding the next.

Mix in the vanilla extract and coconut milk, blending well.

In a separate bowl, combine the all-purpose flour, shredded coconut, baking powder, baking soda, and salt.

Gradually add the dry ingredients to the wet mixture, stirring gently until just combined. Over-mixing can lead to dense cupcakes.

Spoon the batter into the prepared cupcake liners, filling each about two-thirds full.

Bake in the preheated oven for 18–20 minutes, or until a toothpick inserted in the center comes out clean.

Let the cupcakes cool in the pan for a few minutes, then transfer them to a wire rack to cool completely.

Prepare the lime buttercream by beating the softened butter and powdered sugar together until smooth.

Add the lime juice and zest, mixing until fluffy. Adjust the lime juice to achieve your preferred level of tartness.

Frost each cupcake with a generous dollop of lime buttercream and sprinkle with toasted coconut for a beautiful finish.