If the house is sold for £325,000 in, say, November 2016, you will make a gain of £140,000 (£325,000 - £185,000), £70,000 each. The costs of purchase and sale (legal fees, survey fees, stamp duty, selling agent fees etc) can be claimed so they will reduce the gain further. Some of the renovation costs may also be deductible if they weren't claimed against the rental income. By November 2016, you will have owned the property for 68 months of which it was occupied by you for 3, let for 62 and vacant for 3. The following figures are for each of you:
The sum of the gains for the period that you occupied the property and for the last 18 months of ownership should be be exempt fron CGT. That accounts for £21,618 (£70,000 / 68 x 21). The remaining gain of £48,382 is that part of the gain for the letting period which is not covered by the last 18 months of ownership (£70,000 / 68 x 47).
As the property was both occupied by you and it has been let, you are entitled to letting relief which will be £21,618 (the lesser of £40,000, £21,618 and £48,382). That will reduce the remaining gain to £26,674 and the annual Capital Gains Tax exemption of £11,100 will reduce it further to leave you with a net taxable gain of £15,664.
You would need to live in the property for over 18 months to have any chance of reducing the taxable gain as you are given the last 18 months of ownership as a tax free period because it was your main home in any event. Property prices may continue to rise and you may still be left with a significant taxable gain. Worse, property prices may fall.
I would like to make a final point. Main residence relief is given because you make a property your home as opposed to renovating it to sell at a profit in the short term, that profit being taxable as a trading profit or to let it for the medium to long term. If you bought the property with a view to letting it as soon as it was renovated, HMRC may challenge your claim for main residence relief and letting relief as it would not have been your intention to make it your home.
There are two rates of CGT on residential property, 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 you sell the property. Take a look here for more information.
Take a look at HS283 here for more information on the main residence and CGT.
I hope this helps but let me know if you have any further questions.