Tree or horse out West (5)
I believe the answer is:
rowan
'tree' is the definition.
(type of tree)
'horse out west' is the wordplay.
'horse' becomes 'roan' (roan is a kind of horse).
'out' means one lot of letters goes inside another.
'west' becomes 'W' (abbreviation).
'roan' placed around 'w' is 'ROWAN'.
'or' acts as a link.
(Other definitions for rowan that I've seen before include "Mr Atkinson, actor" , "Mountain-ash" , "Sort of ash" , "-- Williams, theologian" , "Tree bearing bright red berries" .)