On 20 March 1974, the Princess and her then-husband Captain Mark Phillips, were en route to London's Buckingham Palace in a chauffeur-driven limousine when a car swerved in front of them on the Mall.
A man named Ian Bell then walked around to where Britain's Princess Anne was sitting in an attempt to kidnap her, at which point Jim, then 31, intervened and was shot three times.
Princess Anne visiting Jim Beaton at Westminster Hosptial
"I thought he was an irate motorist," Jim told the BBC. "I got out of the front of the car and he shot at me. I had no time to think on anything really which was just as well because thinking isn't one of my specialities.
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"I got level with the door and Ian Ball was speaking to Princess Anne, all I remember her saying is 'why do you want me?'"
Jim praised the Princess's "extremely good" actions, saying that she was "cool, calm and collected".
The royal limousine after the incident
"He [Ian Ball] had two guns, one in each hand," added Jim. "He shot me again in the abdomen and I remember I had a new suit on and I didn't want to fall down and damage it."
Police then arrived and managed to get Ian Ball on the ground, although four people were injured as a result and Jim was taken to Westminster Hospital.
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"When Princess Anne came to visit me in hospital we chatted away for a while," said Jim, who was awarded the George Cross for his bravery. "And she said thank you very much."
Jim Beaton holding the door open for Princess Anne
Following his arrest, a letter written by Ian Ball addressed to the Queen was discovered, demanding £3million for Anne's release.
Ian Ball, then 26, was prosecuted for the attempted murder of Jim Beaton, as well as various other offences, and his attempt to abduct Princess Anne remains the closest anyone has come to kidnapping a member of the royal family.
Jim added that Ian Ball's sentence was that he was "to be detained at Her majesty's pleasure and as far as I'm aware, he's still so detained."