Prepare the Pan: Start by lining an 8-inch baking dish with parchment paper. This will prevent the caramels from sticking and help you lift them out easily once set.
Mix it Up: In a medium saucepan, combine 1 cup sugar, 1/4 cup corn syrup, 1/2 cup heavy cream, 1/2 cup coconut milk, and 1/4 cup unsalted butter. Stir this mixture over medium heat until the sugar completely dissolves.
Cook: Without stirring, continue heating the mixture over medium heat until it reaches a temperature of 240°F, which usually takes about 10-15 minutes. Use a candy thermometer for accuracy.
Add Coconut & Vanilla: Once the mixture has reached the desired temperature, remove it from heat and stir in 1/2 cup shredded coconut and 1/2 tsp vanilla extract. Mix well to combine all the ingredients evenly.
Cool & Set: Pour the caramel mixture into the prepared baking dish. Allow it to cool at room temperature for about 1 hour, then refrigerate for 2 hours to set.
Cut & Serve: After the caramels have set, carefully lift them out of the dish using the parchment overhang. Cut into squares and enjoy! Wrap them individually for sharing or gifting.