1046. Normal expenditure out of income.

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


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


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


    (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