Preheat oven to 180 degrees C. Grease and flour a 25cm ring tin.
Cake: In a large bowl mix together the flour, bicarbonate of soda, salt, allspice, cinnamon and nutmeg. Set aside.
In a medium bowl whisk together 1 1/2 cups sugar, oil, eggs, milk and 1/4 cup rum until blended. Make a well in the centre of the dry ingredients. Pour in the rum mixture and stir until combined. Mix in the walnuts.
Pour mixture into prepared tin. Bake in the preheated oven for 60 minutes or until a toothpick inserted into the centre of the cake comes out clean. Allow to cool in the pan. Pierce cake 15 to 20 times with a wooden skewer to prepare the cake for the rum glaze.
Glaze: In a saucepan melt butter in water then bring to a slow boil. Stir in 1 cup sugar and continue to boil for 5 minutes stirring constantly. Remove from heat and let glaze cool for 5 minutes. Stir in rum. Let cool 15 minutes.
Drizzle a small amount of the rum glaze over the top of the skewered cake while it is still in the pan. When the top of the cake can't absorb any more glaze turn the cake out of the pan and onto a plate to repeat the procedure on the bottom of the cake. Let the cake sit until the glaze has soaked in. Put the cake back into the pan and reglaze the top. It may take 24 hours for the cake to completely absorb all of the rum glaze.