Minecraft wiki entry for Rain, associated text: Rain falls one block into the void (Layer -1). This can be seen in creative mode by floating in the void. Note that no particles are emitted from the rain, due to the absence of a block below it.
Rain still falls above the clouds. Notch explains that the gray above the clouds during a storm is another layer of clouds and the origin of the rain.[7]
Raindrop splash particles can be seen on top of blocks of layer 255 at most, even in biomes where it cannot rain.