We are shooting on a Panasonic AF-101 and I understand that the colour space will not be 4:2:2 but 4:2:0, 8 bits, AVCHD codec.
You can plug Atomos Samurai to your AF-101 so as to shoot with 4:2:2.
As I understand it rec 709 requires that the levels remain between 16 and 235
No, HDTV Rec.709 and sRGB IEC61966-2.1 have the same primary colours. 16-235 luma adjustment, which is sometimes required for TV broadcasting, is deployed in HDTV Rec.709 (16-235), SDTV NTSC 16-235 and SDTV PAL 16-235.
When I import my footage what colour space is premiere working in?
sRGB IEC61966-2.1 (not Adobe sRGB).
Does the Panasonic use the full range in it's AVCHD codec and therefore I am seeing the full range in Premiere?
Yes.
How do I manage my workflow between Premiere and After Effects?
Set your AE project to 32-bit and choose either sRGB IEC61966-2.1 or HDTV Rec.709 colour space. Do NOT linearise your working space unless you fully understand linear workflow.
If you work in 16-235 colour space or get some footages in 16-235 colour space, see e.g. this thread on how to reverse adjust luma range for PrPro.
If you import footages exported with HDTV Rec.709 (16-235) colour profile into AE, you should interpret them accordingly irrespective of what your current working space is.
Do I have to restrict the output levels to 16-235 on export as a TIFF sequence or not?
Don't think it's necessary for a cinema project. Ask your recipient for a particular requirements.
Where should I colour grade?
That depends. Some complex colour correction may require compositing work, which is better done in AE.
So as to understand colours better check for Color Correction Handbook by Alexis Van Hurkman.