Take a look at the notes starting here
If one or both your parents met the definition of a "dependent relative" as set out from CG65550 to CG65577 then you can claim exemption from CGT for the whole gain under the part of the main residence rules which deal with the purchase of a property for a dependent relative.
If you don't consider that either of your parents met the dependent relative definition, then each of you and your wife will have a capital gain of £67,500 (£170,000 - £35,000 / 2). You can claim for the costs of purchase and sale such as legal fees, stamp duty, survey fees, selling agent fees etc) which will reduce the gain further.
The first £11,100 of gains made by an individual in the 2015/16 tax year are tax free so that will leave each of you with a net taxable gain of £56,400 (£67,500 - £11,100). The following applies to each of you and your wife individually:
There are two rates of CGT, 18% and 28%. The rate or combination of rates that you will pay will be dependent on the level of your income in the tax year that the property was disposed of, 2015/16. One of the following scenarios will apply:
1 If the sum of your income and the net taxable gain in 2015/16 is £42,385 or less, then all the taxable gain will be charged to CGT at 18%.
2 If your income alone in 2015/16 is £42,385 or more in 2015/16, then all the taxable gain will be charged to CGT at 28%.
3 If your income alone in 2015/16 is less than £42,385 but greater than £42,385 when the net taxable gain is added, then part of the net taxable gain will be charged to CGT at 18% and part at 28%.
You will each need to report the gain in a self-assessment tax return after 5 April 2016. You can register for self-assessment here
. If any CGT is due, it will be payable on 31 January 2017.
I hope this helps but let me know if you have any further questions.