Using the Restricted Read permission in SharePoint 2013 it’s possible to prevent access to historical versions of documents, but it doesn’t work how I expected it to.
To enable the Restricted Read permission within a document library choose Library Settings from the ribbon. Next click Permissions for this document library. Tick the box next to the group for which you wish to enable Restricted Read and click Edit User Permissions from the ribbon.
On the screen that loads untick Read and tick Restricted Read. Click OK to close.
This is where things don’t work as I expected. I expected that when accessing the document library, the Version History option would be removed from the document properties menu, or the version history would only show the latest version. However, when a user with Restricted Read attempts to open the document library from Site Contents they receive the error “Sorry, this site hasn’t been shared with you.”
Restricted Read is described as providing view access to documents. It turns out that this is possible, but only via a direct link to documents in the library e.g. a URL on a page or search.