Line 9-inch square pan with foil, extending edges over sides of pan. Sprinkle nuts evenly in single layer in prepared pan.
Combine butter, sugar, water and salt in medium saucepan. Bring to a boil over medium heat, stirring frequently. Attach candy thermometer to side of pan. Continue boiling about 20 minutes or until sugar mixture reaches hard-crack stage (305° to 310°F) on candy thermometer, stirring frequently. Remove from heat; stir in vanilla. Immediately pour over nuts in pan, spreading to edges with spatula.
Place chocolate in small microwavable bowl. Microwave on MEDIUM (50%) 4 to 5 minutes until chocolate is melted, stirring every 2 minutes.
Lift toffee out of pan using foil; spread chocolate evenly over toffee.
Sprinkle with toasted coconut. Refrigerate about 30 minutes or until chocolate is set.
Bring to room temperature before breaking toffee.
Break toffee into pieces. Store in airtight container at room temperature between sheets of waxed paper.