diff --git a/compiler/testData/compileKotlinAgainstKotlin/annotationOnTypeUseInTypeAlias.kt b/compiler/testData/compileKotlinAgainstKotlin/annotationOnTypeUseInTypeAlias.kt
new file mode 100644
index 00000000000..f4d38f6df6e
--- /dev/null
+++ b/compiler/testData/compileKotlinAgainstKotlin/annotationOnTypeUseInTypeAlias.kt
@@ -0,0 +1,31 @@
+// TARGET_BACKEND: JVM
+// WITH_REFLECT
+// FILE: A.kt
+@Target(AnnotationTarget.TYPE)
+annotation class Anno(val value: String)
+
+class Foo
+
+typealias MyFoo = Foo
+
+class C<T>(val t: T)
+
+typealias MyC = C<@Anno("OK") MyFoo?>
+
+// FILE: B.kt
+fun test(myc: MyC) {}
+
+fun box(): String {
+    test(C(null))
+
+    val mycType = ::test.parameters.single().type
+    val argumentType = mycType.arguments.single().type!!
+    if (!argumentType.isMarkedNullable)
+        return "Fail: argument type should be seen as nullable"
+
+    val annotations = argumentType.annotations
+    if (annotations.toString() != "[@Anno(value=OK)]")
+        return "Fail: $annotations"
+
+    return "OK"
+}
\ No newline at end of file
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/CompileKotlinAgainstKotlinTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/CompileKotlinAgainstKotlinTestGenerated.java
index 10b1492161a..c878917801c 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/CompileKotlinAgainstKotlinTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/CompileKotlinAgainstKotlinTestGenerated.java
@@ -38,6 +38,11 @@ public class CompileKotlinAgainstKotlinTestGenerated extends AbstractCompileKotl
         runTest("compiler/testData/compileKotlinAgainstKotlin/annotationInInterface.kt");
     }
 
+    @TestMetadata("annotationOnTypeUseInTypeAlias.kt")
+    public void testAnnotationOnTypeUseInTypeAlias() throws Exception {
+        runTest("compiler/testData/compileKotlinAgainstKotlin/annotationOnTypeUseInTypeAlias.kt");
+    }
+
     @TestMetadata("annotationsOnTypeAliases.kt")
     public void testAnnotationsOnTypeAliases() throws Exception {
         runTest("compiler/testData/compileKotlinAgainstKotlin/annotationsOnTypeAliases.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrCompileKotlinAgainstKotlinTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrCompileKotlinAgainstKotlinTestGenerated.java
index b0fe25b73dd..f16ce86ba6b 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrCompileKotlinAgainstKotlinTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrCompileKotlinAgainstKotlinTestGenerated.java
@@ -38,6 +38,11 @@ public class IrCompileKotlinAgainstKotlinTestGenerated extends AbstractIrCompile
         runTest("compiler/testData/compileKotlinAgainstKotlin/annotationInInterface.kt");
     }
 
+    @TestMetadata("annotationOnTypeUseInTypeAlias.kt")
+    public void testAnnotationOnTypeUseInTypeAlias() throws Exception {
+        runTest("compiler/testData/compileKotlinAgainstKotlin/annotationOnTypeUseInTypeAlias.kt");
+    }
+
     @TestMetadata("annotationsOnTypeAliases.kt")
     public void testAnnotationsOnTypeAliases() throws Exception {
         runTest("compiler/testData/compileKotlinAgainstKotlin/annotationsOnTypeAliases.kt");
diff --git a/core/deserialization/src/org/jetbrains/kotlin/serialization/deserialization/TypeDeserializer.kt b/core/deserialization/src/org/jetbrains/kotlin/serialization/deserialization/TypeDeserializer.kt
index a94b2acc996..1fc591ef9ce 100644
--- a/core/deserialization/src/org/jetbrains/kotlin/serialization/deserialization/TypeDeserializer.kt
+++ b/core/deserialization/src/org/jetbrains/kotlin/serialization/deserialization/TypeDeserializer.kt
@@ -92,8 +92,12 @@ class TypeDeserializer(
         val declarationDescriptor = constructor.declarationDescriptor
 
         val simpleType = when {
-            expandTypeAliases && declarationDescriptor is TypeAliasDescriptor ->
-                with(KotlinTypeFactory) { declarationDescriptor.computeExpandedType(arguments) }
+            expandTypeAliases && declarationDescriptor is TypeAliasDescriptor -> {
+                val expandedType = with(KotlinTypeFactory) { declarationDescriptor.computeExpandedType(arguments) }
+                expandedType
+                    .makeNullableAsSpecified(proto.nullable)
+                    .replaceAnnotations(Annotations.create(annotations + expandedType.annotations))
+            }
             Flags.SUSPEND_TYPE.get(proto.flags) ->
                 createSuspendFunctionType(annotations, constructor, arguments, proto.nullable)
             else ->