Macdonald's father created a baronet on his retirement in 1813 and on his death in 1826, James inherited the title. Sir James was persuaded to accept the office of Lord High Commissioner of the Ionian Islands, in the hope that the climate of the Mediterranean would improve his poor health. He was appointed to the office on 2 June 1832 and immediately gave up his Hampshire seat in the Commons. He was gazetted a Knight Grand Cross of the Order of St Michael and St George on 22 June, the same day of the subsequent Hampshire by-election. He dined at his father-in-law's at Berkeley Square on 27 June but fell ill the next day and died of cholera on the 29th at Spring Gardens, without having set sail for Corfu or being invested as a knight.
