Make sure you're using the latest version of Parallels Desktop.

What should I do before upgrading my virtual machine to Windows 8/8.1? To keep files, programs, or settings you must install Windows 8.1 by starting the installation from within your current version of Windows.

Important: If you create installation media to install Windows 8.1, and then start your virtual machine from that media and install Windows 8.1, you won't be able to keep your previous files, programs, or settings. Your files, desktop apps, user accounts, and settings come with you. Make sure to backup your data prior to upgrading. You won't be able to keep any files, settings, or programs when you upgrade to Windows 8.1.

You'll need to reinstall your programs after you upgrade to Windows 8.1 The following table shows what you have the option of keeping during an upgrade: When upgrading from You can upgrade to Windows 8.1 from Windows 8, Windows 7, Windows Vista, or Windows XP, but depending on which operating system you're upgrading from, you might not be able to keep all of your files, applications and settings. Important: This article describes how to upgrade an existing Windows virtual machine to Windows 8.1 if you want to install Windows 8 from scratch, please see: KB 4729. Information Which Windows virtual machines can be upgraded to Windows 8.1?

Upgrade windows 8.1