diff --git a/compiler/fir/fir2ir/tests/org/jetbrains/kotlin/codegen/ir/FirBlackBoxCodegenTestGenerated.java b/compiler/fir/fir2ir/tests/org/jetbrains/kotlin/codegen/ir/FirBlackBoxCodegenTestGenerated.java
index 9ef78867e87..f33c7fbec65 100644
--- a/compiler/fir/fir2ir/tests/org/jetbrains/kotlin/codegen/ir/FirBlackBoxCodegenTestGenerated.java
+++ b/compiler/fir/fir2ir/tests/org/jetbrains/kotlin/codegen/ir/FirBlackBoxCodegenTestGenerated.java
@@ -15055,6 +15055,11 @@ public class FirBlackBoxCodegenTestGenerated extends AbstractFirBlackBoxCodegenT
             runTest("compiler/testData/codegen/box/innerNested/innerSimple.kt");
         }
 
+        @TestMetadata("innerWithDefaultArgument.kt")
+        public void testInnerWithDefaultArgument() throws Exception {
+            runTest("compiler/testData/codegen/box/innerNested/innerWithDefaultArgument.kt");
+        }
+
         @TestMetadata("kt3132.kt")
         public void testKt3132() throws Exception {
             runTest("compiler/testData/codegen/box/innerNested/kt3132.kt");
diff --git a/compiler/ir/backend.common/src/org/jetbrains/kotlin/backend/common/lower/InnerClassesLowering.kt b/compiler/ir/backend.common/src/org/jetbrains/kotlin/backend/common/lower/InnerClassesLowering.kt
index 129fbc80def..d85a7e28e97 100644
--- a/compiler/ir/backend.common/src/org/jetbrains/kotlin/backend/common/lower/InnerClassesLowering.kt
+++ b/compiler/ir/backend.common/src/org/jetbrains/kotlin/backend/common/lower/InnerClassesLowering.kt
@@ -46,10 +46,11 @@ class InnerClassesLowering(val context: BackendContext, private val innerClasses
 
             val newConstructor = lowerConstructor(declaration)
             val oldConstructorParameterToNew = innerClassesSupport.primaryConstructorParameterMap(declaration)
+            val variableRemapper = VariableRemapper(oldConstructorParameterToNew)
             for ((oldParam, newParam) in oldConstructorParameterToNew.entries) {
                 newParam.defaultValue = oldParam.defaultValue?.let { oldDefault ->
                     context.irFactory.createExpressionBody(oldDefault.startOffset, oldDefault.endOffset) {
-                        expression = oldDefault.expression.patchDeclarationParents(newConstructor)
+                        expression = oldDefault.expression.transform(variableRemapper, null).patchDeclarationParents(newConstructor)
                     }
                 }
             }
diff --git a/compiler/testData/codegen/box/innerNested/innerWithDefaultArgument.kt b/compiler/testData/codegen/box/innerNested/innerWithDefaultArgument.kt
new file mode 100644
index 00000000000..93dd4786e86
--- /dev/null
+++ b/compiler/testData/codegen/box/innerNested/innerWithDefaultArgument.kt
@@ -0,0 +1,14 @@
+
+// KT-40771
+
+
+class Outer(val o: String, val oo: String = o) {
+    inner class Inner(val k: String, val kk: String = k)
+}
+
+fun box(): String {
+    val o = Outer("O")
+    val i = o.Inner("K")
+
+    return o.oo + i.kk
+}
\ No newline at end of file
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
index b7ee8857843..05364dafe47 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/BlackBoxCodegenTestGenerated.java
@@ -16450,6 +16450,11 @@ public class BlackBoxCodegenTestGenerated extends AbstractBlackBoxCodegenTest {
             runTest("compiler/testData/codegen/box/innerNested/innerSimple.kt");
         }
 
+        @TestMetadata("innerWithDefaultArgument.kt")
+        public void testInnerWithDefaultArgument() throws Exception {
+            runTest("compiler/testData/codegen/box/innerNested/innerWithDefaultArgument.kt");
+        }
+
         @TestMetadata("kt3132.kt")
         public void testKt3132() throws Exception {
             runTest("compiler/testData/codegen/box/innerNested/kt3132.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
index 1fcc1f299a4..9370cc7962b 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/LightAnalysisModeTestGenerated.java
@@ -16450,6 +16450,11 @@ public class LightAnalysisModeTestGenerated extends AbstractLightAnalysisModeTes
             runTest("compiler/testData/codegen/box/innerNested/innerSimple.kt");
         }
 
+        @TestMetadata("innerWithDefaultArgument.kt")
+        public void testInnerWithDefaultArgument() throws Exception {
+            runTest("compiler/testData/codegen/box/innerNested/innerWithDefaultArgument.kt");
+        }
+
         @TestMetadata("kt3132.kt")
         public void testKt3132() throws Exception {
             runTest("compiler/testData/codegen/box/innerNested/kt3132.kt");
diff --git a/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java b/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
index 3d2e468f177..ce703a9799c 100644
--- a/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
+++ b/compiler/tests/org/jetbrains/kotlin/codegen/ir/IrBlackBoxCodegenTestGenerated.java
@@ -15055,6 +15055,11 @@ public class IrBlackBoxCodegenTestGenerated extends AbstractIrBlackBoxCodegenTes
             runTest("compiler/testData/codegen/box/innerNested/innerSimple.kt");
         }
 
+        @TestMetadata("innerWithDefaultArgument.kt")
+        public void testInnerWithDefaultArgument() throws Exception {
+            runTest("compiler/testData/codegen/box/innerNested/innerWithDefaultArgument.kt");
+        }
+
         @TestMetadata("kt3132.kt")
         public void testKt3132() throws Exception {
             runTest("compiler/testData/codegen/box/innerNested/kt3132.kt");
diff --git a/js/js.tests/test/org/jetbrains/kotlin/js/test/es6/semantics/IrJsCodegenBoxES6TestGenerated.java b/js/js.tests/test/org/jetbrains/kotlin/js/test/es6/semantics/IrJsCodegenBoxES6TestGenerated.java
index 2f053d982cd..2009d1fb431 100644
--- a/js/js.tests/test/org/jetbrains/kotlin/js/test/es6/semantics/IrJsCodegenBoxES6TestGenerated.java
+++ b/js/js.tests/test/org/jetbrains/kotlin/js/test/es6/semantics/IrJsCodegenBoxES6TestGenerated.java
@@ -13055,6 +13055,11 @@ public class IrJsCodegenBoxES6TestGenerated extends AbstractIrJsCodegenBoxES6Tes
             runTest("compiler/testData/codegen/box/innerNested/innerSimple.kt");
         }
 
+        @TestMetadata("innerWithDefaultArgument.kt")
+        public void testInnerWithDefaultArgument() throws Exception {
+            runTest("compiler/testData/codegen/box/innerNested/innerWithDefaultArgument.kt");
+        }
+
         @TestMetadata("kt3132.kt")
         public void testKt3132() throws Exception {
             runTest("compiler/testData/codegen/box/innerNested/kt3132.kt");
diff --git a/js/js.tests/test/org/jetbrains/kotlin/js/test/ir/semantics/IrJsCodegenBoxTestGenerated.java b/js/js.tests/test/org/jetbrains/kotlin/js/test/ir/semantics/IrJsCodegenBoxTestGenerated.java
index a9a1376faf1..606d31fc2cd 100644
--- a/js/js.tests/test/org/jetbrains/kotlin/js/test/ir/semantics/IrJsCodegenBoxTestGenerated.java
+++ b/js/js.tests/test/org/jetbrains/kotlin/js/test/ir/semantics/IrJsCodegenBoxTestGenerated.java
@@ -13055,6 +13055,11 @@ public class IrJsCodegenBoxTestGenerated extends AbstractIrJsCodegenBoxTest {
             runTest("compiler/testData/codegen/box/innerNested/innerSimple.kt");
         }
 
+        @TestMetadata("innerWithDefaultArgument.kt")
+        public void testInnerWithDefaultArgument() throws Exception {
+            runTest("compiler/testData/codegen/box/innerNested/innerWithDefaultArgument.kt");
+        }
+
         @TestMetadata("kt3132.kt")
         public void testKt3132() throws Exception {
             runTest("compiler/testData/codegen/box/innerNested/kt3132.kt");
diff --git a/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java b/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
index 6059bac5be6..68ed0d86378 100644
--- a/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
+++ b/js/js.tests/test/org/jetbrains/kotlin/js/test/semantics/JsCodegenBoxTestGenerated.java
@@ -13120,6 +13120,11 @@ public class JsCodegenBoxTestGenerated extends AbstractJsCodegenBoxTest {
             runTest("compiler/testData/codegen/box/innerNested/innerSimple.kt");
         }
 
+        @TestMetadata("innerWithDefaultArgument.kt")
+        public void testInnerWithDefaultArgument() throws Exception {
+            runTest("compiler/testData/codegen/box/innerNested/innerWithDefaultArgument.kt");
+        }
+
         @TestMetadata("kt3132.kt")
         public void testKt3132() throws Exception {
             runTest("compiler/testData/codegen/box/innerNested/kt3132.kt");