Born Courtauld Thomson, he was the son of Robert William Thomson of Edinburgh, inventor of the pneumatic tyre. After the death of his father in 1873, his mother Clara married John Fletcher Moulton in 1875, later Lord Moulton. She died in 1888. Courtauld Thomson was educated at Eton and Magdalen College, Oxford.
Thomson had a successful business career, becoming chairman of the Employers' Liability Assurance Corporation, among other directorships. In 1914 he was appointed Commissioner for the Red Cross and Order of St John. In 1916 he was appointed a CB (Commander of the Order of the Bath) and in 1918, a KBE (Knight Commander of the Order of the British Empire). His country seat was at Dorneywood, Buckinghamshire; he originally bought the lease for Dorney House during the Armistice and shortly afterwards he came to love the house and bought it freehold. In the Second World War he turned it into a hostel for officers in the allied air forces and it became known as a leisure retreat for the officers of the Commonwealth armed services. In 1942, together with his two sisters (one of whom, Elspeth, was the widow of the writer Kenneth Grahame) he presented Dorneywood to the nation for use by a Minister of the Crown.
In 1944 Courtauld-Thomson was raised to the peerage "for philanthropic and public services". Having changed his surname to Courtauld-Thomson, he took the title of Baron Courtauld-Thomson, of Dorneywood in the County of Buckingham.
By purchasing land when ever the opportunity arose, Lord Courtauld-Thomson extended his estate to 250 acres, and during his ownership, Dorneywood, was very much a working farm (part tenanted). Lord Courtauld-Thomson also established a pleasant garden.