Malcolm Turnbull has taken a pummelling in Parliament over his personal investments in a Caribbean tax haven, including two registered at a Cayman Islands address described by US President Barack Obama as "the biggest tax scam on record".

The Prime Minister's investment portfolio was raised in the Senate before dominating question time on Wednesday as he insisted that all his offshore investments are "taxed in full in Australia".

Labor Senator Sam Dastyari linked Mr Turnbull's offshore holdings to the Coalition's move to exempt wealthy business owners from new regulations forcing them to disclose how much tax their companies pay each year and claimed those who invest in tax havens do not "play by the same rules" on tax as ordinary Australians.

According to Parliament's register of members' interests, Mr Turnbull has invested in two hedge funds since July last year – Zebedee Growth Fund and MSD Torchlight Partners – and both list their address as Ugland House, George Town, Grand Cayman.

More than 18,000 companies incorporated in the Caymans - where the corporate tax rate is zero - use the five-storey building as their registered business address.

In 2008, as he campaigned for the presidency, Mr Obama lambasted global companies using Ugland House.

"You've got a building in the Cayman Islands that supposedly houses 12,000 corporations. That's either the biggest building or the biggest tax scam on record," he said.

On Wednesday, Senator Dastyari told the Senate: "Ugland House on Grand Cayman Island is one of the most pre-eminent addresses in the world for tax minimisation.

"There is one reason people invest in the Cayman Islands – so they don't have to play by the same rules as the rest of us. This isn't fair. And it's not right."

"Why have we seen Coalition senators refusing to ask companies earning over $100 million to declare how much tax they pay?

"How is it appropriate that the Prime Minister of this country thinks it is acceptable to have his investments sitting in the Cayman Islands?"

Senator Dastyari acknowledged the investments were "all legal and disclosed" but asked, "Is any of it appropriate?"

Mr Turnbull was later peppered with questions, with Labor's Tony Burke pointing out that the Prime Minister had declared new investments in Caymans-based hedge funds even after Australian Tax Commissioner Chris Jordan had described the Caribbean nation as a "tax haven" at a Senate hearing.

Mr Turnbull said he and wife Lucy had no control over individual investments made by the hedge funds in which they invested and said Labor MPs might find their own superannuation funds have links to the Caymans. Large funds like AustralianSuper invest in some companies that are incorporated in the Caymans.

"The income of the fund is taxed in the hands of the investors in their own home jurisdictions. So the fact is that all of my or Lucy's income from investments including funds which are registered in the Cayman Islands is taxed in full in Australia," he said.

Lucy Turnbull, who handles his investments through a company called Turnbull and Partners, told Fairfax Media last month that she would review her own board positions and investments for any conflict of interest.

In July last year, Fairfax Media revealed Mr Turnbull – whose wealth is estimated at $200 million - invested in a "vulture fund" based in the Cayman Islands.

The Bowery Opportunity Fund has a minimum buy-in of $US1 million, according to its founder Vladimir Jelisavcic. He has boasted of annual returns of 21 per cent through targeting "overlooked, middle market and trade claim opportunities, both in stressed companies as well as distressed companies many of which were in Chapter 11 [bankruptcy]".

Bowery bought $80 million in debts associated with the bankrupted Chicago Tribune and Los Angeles Times and recovered 100¢ in the dollar.

The investment was criticised by the Tax Justice Network – a group of churches, social campaigners and unions – for being out of step with former treasurer Joe Hockey's claims that the government was cracking down on the use of secrecy jurisdictions and the offshoring of profits by multinationals.

Jason Ward, who wrote last year's landmark report into Australian corporate tax avoidance for the Tax Justice Network, said there was no reason to suspect that Mr Turnbull had not paid all the tax due on his investment returns.

But he said it was an "odd look" for someone in occupying the highest office in Australia to be investing directly in tax aggressive Wall Street firms.

The government has since introduced a bill to force multinationals to pay tax on the sales they make in Australia

MSD Torchlight Partners is a hedge fund operated by MSD Capital, the investment vehicle of billionaire tech guru Michael Dell, the founder of computer firm Dell Inc. According to the US Securities and Exchange Commission, it is a minimum $US100,000 to invest in the Torchlight fund.

Zebedee – which has a minimum $US250,000 buy in - is described by the SEC as a "Cayman Islands exempted company".

On Tuesday, a government-dominated Senate committee recommended the Better Targeting the Income Tax Transparency Laws Bill proceed. It is expected to attract enough crossbench support to be passed.

Earlier this month former Australian of the year Dick Smith said Mr Turnbull will be "ratting on typical Australians who pay their tax" if the Coalition goes through with plans to shield large private companies from having to disclose how much tax they pay.

In 2012, the presidential campaign of Republican Party candidate Mitt Romney hit controversy when it was revealed he had investments based in the Caymans.

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