The royal house said in a statement that in addition to renouncing his inheritance,Felipe is stripping Juan Carlos of his annual stipend.
The decision comes amid an ongoing investigation by Swiss prosecutors into an offshore account allegedly operated for Juan Carlos. The account allegedly received €88 million euros ($158 million) from Saudi Arabia's late King Abdullah in 2008,which prosecutors believes could be kickback payments,according to the Swiss newspaperTribune de Geneva.
On Saturday,British newspaperThe Telegraph reported that Felipe was named as a beneficiary of an offshore fund that controls the Swiss account with an alleged €65 million euro gift ($117 million) from Saudi Arabia given to his father when he was on the throne.
Felipe denied any knowledge of the fund in Sunday's statement.
According to documents seen byThe Telegraph,Juan Carlos set up the Lucum Foundation on July 31 2008,with an office in Panama City and an account at Mirabaud private bank in Geneva to hold the gift as a"donation"from"the king of Saudi Arabia".
It is not clear why Juan Carlos received the gift but the Spanish and Saudi royal families were known to be close. Courts in Spain and Switzerland are looking at the circumstances behind the awarding of a major high- speed train contract in Saudi Arabia to Spanish businesses.
In Lucum's statutes,Felipe,then the Prince of Asturias,is named as the foundation's second beneficiary,and charged by his father with the duty to look after the rest of the family in the event of him inheriting the fund.