Rural & General Insurance founder Charles Pratten has been jailed for five years after failing to declare more than $5 million income.

Pratten was found guilty last year at the NSW Supreme Court on seven counts of obtaining a financial advantage by deception, in deliberately understating his income on tax returns.

He had previously been convicted in June 2012, but appealed and a retrial was ordered.

The jury heard that following changes to Australian laws requiring insurers to hold higher levels of capital, Pratten split his business into an Australian-based broker and an insurance company operating out of Vanuatu.

The broking company sold cover notes and policies in the name of the Vanuatu insurer, and remitted two-thirds of those premiums to Vanuatu into trust companies.

About 25% of the amounts remitted to Vanuatu were then transferred back to Pratten, or to certain third parties he controlled.

Jurors had to decide whether that money amounted to income for Pratten, and whether he dishonestly understated his income to gain financial advantage.

The jury found him guilty on seven counts relating to tax returns between 2003 and 2009.

In sentencing on Friday, Justice Stephen Rothman said he substantially accepts the Crown’s case.

The maximum sentence for each offence is 10 years, but Justice Rothman said Pratten is a first-time offender, suffers depression and will “find it difficult to cope” with prison life.

He imposed an aggregate sentence of five years, starting from January 20 this year, with a non-parole period of two years.

“I impose a sentence that is, given the subjective circumstances of the offender and the objective circumstances of the offence, at the lowest end of the range I consider appropriate and available,” he said.