1046. Normal expenditure out of income.

A transfer of value is an exempt transfer if, or to the extent that, it is shown:

  1.  

    (1)     that it was made as part of the transferor's normal expenditure1;

  2.  

    (2)     that (taking one year with another) it was made out of his income2; and

  3.  

    (3)     that, after allowing for all transfers of value forming part of his normal expenditure, the transferor was left with enough income to maintain his usual standard of living3.

A payment of a premium on a policy of insurance on the transferor's life, or a gift of money or money's worth applied, directly or indirectly, in