Preheat oven to 180°C / 360°F Using an electric mixer, beat butter, sugar, vanilla and a pinch of salt on high speed until pale and fluffy. Add eggs, one at a time, beating well after each addition. Sift flour, baking powder and baking soda into a bowl. Fold butter mixture and sour cream alternately through flour mixture until just combined.
Combine the brown sugar, cinnamon and walnuts in a small bowl. Grease a cake ring and spoon in one-third of the cake batter. Scatter over half the sugar mixture, then top with half the remaining cake batter. Scatter over remaining sugar mixture and top with remaining cake batter.
Bake for 50 minutes or until a skewer inserted into the center comes out clean. Stand for 5 minutes, then transfer to a wire rack to cool. Dust with powder sugar to serve.