Inviting people to an event not working, send to email not iCal

Ok here goes:

I am using myname@gmail.com as my Apple ID and email address. I can send my wife invitations to her address hername@gmail.com (also her Apple ID). Those invites appear in her calendar on her iPhone 4S and on her ipad mini. However if she creates an event on either of her devices they end up in my email folder and not in iCal as a pop up message. Why is this happening? How can I fix it?

Things I have tried:

1. Reset settings on both devices

2. Removed secondary emails on Apple ID both users

3. Removed icloud and re enabled on all devices

Other details:

- My wife has an unshared calendar called "Home"

- I have an unshared calendar called "personal"

- We have shared calendars that function perfectly

- Both of us use my Apple ID for purchasing music etc. on our respective devices.

- My brother in law can also receive my invites but cannot send to me or my wife.

Basically, why are my wife's invitations going into my email and not into iCal!