You will want the headstock accessable and not up against the corner, often have long work sticking out the end. Tailstock can be against wall, its only a minor annoyance not being able to slide it off. It will come off by removing the nut but it is a pain to put back.
I've put mine with the headstock pointing out the garage door, tailstock in line with the mill table for if/when I need a bit of extra room, can park the tailstock on the mill table and indicate the part / align by moving it. Consequence of a small (but perfectly formed) lathe!
With the WM you WILL need to get in the back of the headstock to change gears, move belts, if the cover hinges you need a little bit more room...
Re the ER32 collet chuck on an MT, be aware you won't be able to pass work through it, there are also plate-mounted ER chucks (EvilBay search "ER32 chuck 100mm"), a bit more money but allow work to pass through, may even have the right bolt centres for your lathe spindle if it has the 4-bolt mounting? (You'll need to fit it to the spindle nose register or otherwise centre it every time you fit it, quicker to machine to the register once!).
Otherwise, good selection of tooling, there are some bigger sets of lathe tools with a selection of carbide insert holders for turning, boring bar, for not a lot of money too, the holders are probably good enough, inserts are your choice!
I can't recommend a QCTP highly enough, they speed up jobs and stop all the hunting for shims/the right tool, getting everything on centre height all the time...
Dave H. (the other one)
I left plenty of room for access to changewheels when I moved mine.You will want the headstock accessable and not up against the corner, often have long work sticking out the end. Tailstock can be against wall, its only a minor annoyance not being able to slide it off. It will come off by removing the nut but it is a pain to put back.
...and hooked up.
That tool doesnt actually look like a lathe tool, you perhaps need to do some research regarding grinding up an hss tool.
Did you check the center height too.
Me neither was a form tool I'd ground for something, I can't remember what - is it 60 degrees, was possibly for threading?The tool came with the lathe but as I say I have no idea what it's for, sharp point with no radius to speak of.
Thanks for the heads up. Stuck the minimum bid on it when you posted and forgot all about it. Won and arrived today.You'd need to check it's an MT2, but this looks good?
https://www.ebay.co.uk/itm/k-o-lee-Chuck-1-2-Lathe-Drill-Press-Milling-Engineer/114103899296?hash=item1a911f54a0:g:MtQAAOSw-s5dn6x4&LH_Auction=1
I'm pretty sure I have a spare chuck in the cave, but would need to check.
Do you have a DTI, preferably with a magnetic base? Reason I ask is that I wonder whether your tools are on-centre.