Spice in fruitcake Margaret reduced (6)
I believe the answer is:
nutmeg
'spice' is the definition.
(nutmeg is a kind of spice)
'fruitcake margaret reduced' is the wordplay.
'fruitcake' becomes 'nut' (I've seen this in another clue).
'margaret reduced' becomes 'Meg' (short for Margaret; 'reduced' suggests an abbreviation).
'nut'+'meg'='NUTMEG'
'in' acts as a link.
(Other definitions for nutmeg that I've seen before include "Hard seed of tropical tree grated for spice" , "Hard seed used as seasoning" , "Hard fruit and girl for a spice" , "spicy stuff" , "Aromatic spicy kernel" .)