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If you cuase wounds with a flamer template is it still closest to closest or do you allocated to models under the template. It was my understanding that you only allocated wounds under a template if it was barrage indirect fire. Otherwise its normal shooting wound allocation. My opponent believes it should be under the template only but I cant seem to find anyway to refute his claim. Am I wrong in this?

No, he needs to prove he has an exception to the wound allocation rules.

Closest to closest unless you have a rule stating otherwise.

You don't need to refute it. You point to the general rules and he has to find where the template rules differ in this regard.
(Spoiler: They don't.)

Yeah, blast and templates only tell you how many models you hit. The only thing they do is replace the to-hit die roll.

In the case of a regular flamer, you could treat 5 flamer hits as being the same as 5 bolter hits, at least, for the purpose of wound allocation.