diff --git a/idea/src/org/jetbrains/kotlin/idea/quickfix/createFromUsage/createVariable/CreateLocalVariableActionFactory.kt b/idea/src/org/jetbrains/kotlin/idea/quickfix/createFromUsage/createVariable/CreateLocalVariableActionFactory.kt
index 02510e1ff17..6f8010bcab4 100644
--- a/idea/src/org/jetbrains/kotlin/idea/quickfix/createFromUsage/createVariable/CreateLocalVariableActionFactory.kt
+++ b/idea/src/org/jetbrains/kotlin/idea/quickfix/createFromUsage/createVariable/CreateLocalVariableActionFactory.kt
@@ -44,7 +44,7 @@ object CreateLocalVariableActionFactory : KotlinSingleIntentionActionFactory() {
         val propertyName = refExpr.getReferencedName()
 
         val container = refExpr.parents
-            .filter { it is KtBlockExpression || it is KtDeclarationWithBody }
+            .filter { it is KtBlockExpression || it is KtDeclarationWithBody && it.bodyExpression != null }
             .firstOrNull() as? KtElement ?: return null
 
         return object : CreateFromUsageFixBase<KtSimpleNameExpression>(refExpr) {
diff --git a/idea/testData/quickfix/createFromUsage/createVariable/localVariable/inAnnotation.kt b/idea/testData/quickfix/createFromUsage/createVariable/localVariable/inAnnotation.kt
new file mode 100644
index 00000000000..705be854007
--- /dev/null
+++ b/idea/testData/quickfix/createFromUsage/createVariable/localVariable/inAnnotation.kt
@@ -0,0 +1,13 @@
+// "Create local variable 'defaultPreferencesName'" "false"
+// ACTION: Create abstract property 'defaultPreferencesName'
+// ACTION: Create parameter 'defaultPreferencesName'
+// ACTION: Create property 'defaultPreferencesName'
+// ACTION: Rename reference
+// ERROR: Unresolved reference: defaultPreferencesName
+// ERROR: Default value of annotation parameter must be a compile-time constant
+
+class AppModule {
+    val defaultPreferencesName  = "defaultPreferences"
+
+    annotation class Preferences(val type: String = <caret>defaultPreferencesName)
+}
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/kotlin/idea/quickfix/QuickFixTestGenerated.java b/idea/tests/org/jetbrains/kotlin/idea/quickfix/QuickFixTestGenerated.java
index 17909b639d2..8fea2054496 100644
--- a/idea/tests/org/jetbrains/kotlin/idea/quickfix/QuickFixTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/idea/quickfix/QuickFixTestGenerated.java
@@ -4204,6 +4204,11 @@ public class QuickFixTestGenerated extends AbstractQuickFixTest {
                     runTest("idea/testData/quickfix/createFromUsage/createVariable/localVariable/inAccessorWithExpressionBody.kt");
                 }
 
+                @TestMetadata("inAnnotation.kt")
+                public void testInAnnotation() throws Exception {
+                    runTest("idea/testData/quickfix/createFromUsage/createVariable/localVariable/inAnnotation.kt");
+                }
+
                 @TestMetadata("inBinaryOperation.kt")
                 public void testInBinaryOperation() throws Exception {
                     runTest("idea/testData/quickfix/createFromUsage/createVariable/localVariable/inBinaryOperation.kt");