To make custard, combine the milk, cream, sugar and extract in a medium saucepan; bring to the boil. Whisk the eggs in a large bowl. Gradually add the hot milk mixture to the egg mixture while whisking constantly.
Trim crusts from bread. Spread each slice with butter; cut into four triangles. Layer the bread, overlapping, in the dish; sprinkle with sultanas. Pour custard over the bread; sprinkle with nutmeg.
Place the ovenproof dish in a large baking dish. Add enough boiling water to come halfway up sides of ovenproof dish. Bake about 45 minutes or until the pudding is set. Remove pudding from baking dish; stand 5 minutes before serving. Serve dusted with sifted icing sugar, if desired.