Preheat oven to 180°C (355ºF). Beat the butter, sugar and lemon rind in an electric mixer until light and creamy. Add the eggs and beat well. Mix through the coconut, flour and milk with a wooden spoon until smooth. Pour into a 20cm-square cake tin lined with non-stick baking paper and bake for 40 minutes or until cooked when tested with a skewer. Cool cake in tin.
To make the lemon syrup, combine the sugar, water and lemon juice in a saucepan over medium heat and stir until dissolved. Simmer for 5 minutes or until thickened slightly. Pour over warm or cool cake. Serves 8–10.