In a large bowl, cream together the butter and sugar. Beat in the eggs, vanilla and sour cream. Combine the flour, baking powder, salt and nutmeg, stir into the creamed mixture until just blended. Dough will be light and sticky. Cover or wrap dough and chill overnight.
Preheat the oven to 180 degrees C. On a lightly floured surface, roll the dough out to 3mm thickness. Cut into desired shapes using biscuit cutters. Place biscuits 2 to 3cm apart onto ungreased baking trays.
Bake in the preheated oven for 8 to 10 minutes, until biscuits turn a very light brown. Remove from baking trays to cool on wire racks. Decorate with your favourite icing recipe if desired.