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Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.
Divide the gain in two before applying any reliefs. Each part owner will be entitled to letting relief so long as it was their main residence during their respective periods of ownership and it was let during their respective periods of ownership. If you became the owners at the same time, then you will each get up to £40,000 letting relief.
I hope this helps but let me know if you have any further questions.
The reason I said that you should divide the gain in two is so that you apply the reliefs individually to that share of the gain. Sometimes, it results in more letting relief being due and sometimes each part-owner will get 50% of the total for a joint calculation. Certainly, on larger gains, the letting relief for more than one owner can be more than if the caluculation was done jointly (the wrong way, by the way).
If you let me have your calculations, I will take a look at them.
Letting relief for each of you in your case is the lesser of £40,000 (the maximum), £10,184 (the gain covered by the period you lived in the property and the last 18 months of ownership) and £42,032 (the gain covered by letting but excluding the last 18 months of ownership if the property was let during that period). If the £42,032 does represent the letting period as described, then your letting relief is £10,184 each.