Wife cuts bay tree (5)
I believe the answer is:
rowan
'tree' is the definition.
(type of tree)
'wife cuts bay' is the wordplay.
'wife' becomes 'w' (abbreviation).
'cuts' indicates putting letters inside (some letters cut their way into a word).
'bay' becomes 'roan' (both are a type of horse).
'w' placed inside 'roan' is 'ROWAN'.
(Other definitions for rowan that I've seen before include "The mountain ash tree" , "Mountain-ash" , "ash native to mountain regions" , "Sort of ash" , "Tree - archbishop" .)