The chargeable event gain certificate should show the number of relevant years.
Assuming that your wife never withdrew more than 5% of the original invesment in any one policy year, there would have been no chargeabkle event gains until the final encashment. Therefore, the number of relevant years is 21.
The cash taken out over the life of the bond has to be taken into account at the final reckoning so as to arrive at the actual gain made since inception. Had you not withdrawn any cash until the final encashment, the final value would have been much greater. Your wife invested £55,000 and took out £162,105.92 (£55,000.00 + £119,105.92). The gain is, therefore, £107,105.92 (£162,105.92 - £55,000.00).
The chargeable event gain should be divided by the number of relevant years as shown on the certificate. That gives you £5,100 (£107,105.92 / 21). Add £5,100 to your wife's income for 2015/16 and you get £36,201 (£5,100 + £31,101). As £36,201 is less than £41,785, the point at which the sum of the personal allowance and the basic rate tax threshold ends, there can be no tax to pay on the gain unless it was an offshore bond which is deemed not to have suffered basic rate tax at source on gains arising from it. UK bond gains are treated as basic rate tax paid.
Assuming that your wife completed a tax return for 2015/16, if HMRC are asking for a tax payment on the gain, either the gain was disclosed incorrectly in the return or its an offshore bond gain in which case there will be a tax liability on it.
I hope this helps but let me know if you have any further questions.