diff --git a/compiler/procdefutil.pas b/compiler/procdefutil.pas
index f67b04c7cb..a0562bf4dd 100644
--- a/compiler/procdefutil.pas
+++ b/compiler/procdefutil.pas
@@ -956,7 +956,7 @@ implementation
       invokename:=method_name_funcref_invoke_decl+'__FPCINTERNAL__'+fileinfo_to_suffix(sym.fileinfo);
 
       ps:=cprocsym.create(invokename);
-      pd:=tprocdef(tabstractprocdef(n.resultdef).getcopyas(procdef,pc_normal,'',false));
+      pd:=tprocdef(tabstractprocdef(n.resultdef).getcopyas(procdef,pc_normal_no_hidden,'',false));
       pd.aliasnames.clear;
 
       pd.procsym:=ps;
@@ -966,8 +966,6 @@ implementation
       pd.localst.symtablelevel:=normal_function_level;
       { reset procoptions }
       pd.procoptions:=[];
-      { to simplify some checks }
-      pd.was_anonymous:=true;
       ps.ProcdefList.Add(pd);
       pd.forwarddef:=false;
       { set procinfo and current_procinfo.procdef }
@@ -975,6 +973,7 @@ implementation
       pi.procdef:=pd;
       if not assigned(pinested) then
         begin
+          insert_funcret_para(pd);
           insert_funcret_local(pd);
           { we always do a call, namely to the provided function }
           include(pi.flags,pi_do_call);
@@ -989,11 +988,14 @@ implementation
           { fix function return symbol }
           pd.funcretsym:=pinested.procdef.funcretsym;
           pinested.procdef.funcretsym:=nil;
+          insert_funcret_para(pinested.procdef);
           insert_funcret_local(pinested.procdef);
           { the nested function needs access to the parent's framepointer to
             access the capturer }
           insert_parentfp_para(pinested.procdef);
         end;
+      { to simplify some checks, but only after insert_funcret_para }
+      pd.was_anonymous:=true;
       capturedef.symtable.insertsym(ps);
       owner.addnestedproc(pi);
 
@@ -1073,8 +1075,12 @@ implementation
         end;
       if assigned(pd.returndef) and not is_void(pd.returndef) then
         begin
+          if assigned(pinested) then
+            sym:=pinested.procdef.funcretsym
+          else
+            sym:=pd.funcretsym;
           n1:=cassignmentnode.create(
-                      cloadnode.create(pd.funcretsym,pd.localst),
+                      cloadnode.create(sym,sym.owner),
                       n1
                     );
           { captured variables cannot be in registers }
diff --git a/tests/test/tfuncref54.pp b/tests/test/tfuncref54.pp
new file mode 100644
index 0000000000..a0270e19c7
--- /dev/null
+++ b/tests/test/tfuncref54.pp
@@ -0,0 +1,33 @@
+program tfuncref54;
+
+{$mode objfpc}{$H+}
+{$modeswitch functionreferences}
+
+function OuterFunc: String;
+begin
+  Result := 'Foobar';
+end;
+
+procedure DoTest;
+
+  function NestedFunc: String;
+  begin
+    Result := 'Hello World';
+  end;
+
+var
+  func: reference to function: String;
+begin
+  func := @NestedFunc;
+  if func() <> 'Hello World' then
+    Halt(1);
+  if NestedFunc() <> 'Hello World' then
+    Halt(2);
+  func := @OuterFunc;
+  if func() <> 'Foobar' then
+    Halt(3);
+end;
+
+begin
+  DoTest;
+end.