HT201363 Erased ipad to give to my wife now it wont let me activate (we share the same id)

I Purchased a new ipad air for my self and wanted to give my old ipad 3 32gb to my wife (she currently has ipad 16gb with no space). we share the same apple ID.
I backed up my old ipad then erased all settings (I did not log out of the cloud of switch off find my phone). Now when i switch on my old ipad it says this device is logged in and i can clearly see it is my ID but when I enter the password which is correct is states this user cant activate this device.
if I login to Icloud my old device does NOT appear at all in find my phone however when I look at settings the device is displayed (serial No.s match and states it is logged in.
If I check the status of the Ipad it states it is locked.
Please Help

If you want to sell or give away your iPad, make sure you erase all content and settings:
Go to Settings > General > Reset, then tap Erase All Content and Settings.
This will completely erase your device and turn off iCloud, iMessage, FaceTime, Game Center, and other services.
If you're using iOS 7/8 and have Find My iPhone turned on, your Apple ID and password will be required. After you provide your password, the device will be erased and removed from your account so that the next owner can activate it.
http://support.apple.com/kb/HT5661

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