diff --git a/idea/idea-completion/src/org/jetbrains/kotlin/idea/completion/handlers/WithTailInsertHandler.kt b/idea/idea-completion/src/org/jetbrains/kotlin/idea/completion/handlers/WithTailInsertHandler.kt
index 99904e18a78..be1cc8472e6 100644
--- a/idea/idea-completion/src/org/jetbrains/kotlin/idea/completion/handlers/WithTailInsertHandler.kt
+++ b/idea/idea-completion/src/org/jetbrains/kotlin/idea/completion/handlers/WithTailInsertHandler.kt
@@ -21,6 +21,7 @@ import com.intellij.codeInsight.completion.InsertHandler
 import com.intellij.codeInsight.completion.InsertionContext
 import com.intellij.codeInsight.lookup.Lookup
 import com.intellij.codeInsight.lookup.LookupElement
+import com.intellij.openapi.editor.Document
 import com.intellij.psi.PsiDocumentManager
 import org.jetbrains.kotlin.idea.completion.KEEP_OLD_ARGUMENT_LIST_ON_TAB_KEY
 import org.jetbrains.kotlin.idea.completion.smart.SmartCompletion
@@ -55,8 +56,11 @@ class WithTailInsertHandler(val tailText: String,
         //TODO: analyze parenthesis balance to decide whether to replace or not
         var insert = true
         if (overwriteText) {
-            var offset = document.charsSequence.skipSpacesAndLineBreaks(tailOffset)
-            if (document.isTextAt(offset, tailText)) {
+            var offset = tailOffset
+            if (tailText != " ") {
+                offset = document.charsSequence.skipSpacesAndLineBreaks(offset)
+            }
+            if (shouldOverwriteChar(document, offset)) {
                 insert = false
                 offset += tailText.length
                 tailOffset = offset
@@ -85,6 +89,12 @@ class WithTailInsertHandler(val tailText: String,
         }
     }
 
+    private fun shouldOverwriteChar(document: Document, offset: Int): Boolean {
+        if (!document.isTextAt(offset, tailText)) return false
+        if (tailText == " " && document.charsSequence.isCharAt(offset + 1, '}')) return false // do not overwrite last space before '}'
+        return true
+    }
+
     companion object {
         val COMMA = WithTailInsertHandler(",", spaceBefore = false, spaceAfter = true /*TODO: use code style option*/)
         val RPARENTH = WithTailInsertHandler(")", spaceBefore = false, spaceAfter = false)
@@ -92,6 +102,6 @@ class WithTailInsertHandler(val tailText: String,
         val RBRACE = WithTailInsertHandler("}", spaceBefore = true, spaceAfter = false)
         val ELSE = WithTailInsertHandler("else", spaceBefore = true, spaceAfter = true)
         val EQ = WithTailInsertHandler("=", spaceBefore = true, spaceAfter = true) /*TODO: use code style options*/
-        val SPACE = WithTailInsertHandler(" ", spaceBefore = false, spaceAfter = false, overwriteText = false)
+        val SPACE = WithTailInsertHandler(" ", spaceBefore = false, spaceAfter = false, overwriteText = true)
     }
 }
diff --git a/idea/idea-completion/testData/handlers/basic/AddLabelToReturn.kt b/idea/idea-completion/testData/handlers/basic/AddLabelToReturn.kt
new file mode 100644
index 00000000000..0157a3d39ec
--- /dev/null
+++ b/idea/idea-completion/testData/handlers/basic/AddLabelToReturn.kt
@@ -0,0 +1,5 @@
+val v: Boolean = run {
+    return<caret> true
+}
+
+// ELEMENT: "return@run"
\ No newline at end of file
diff --git a/idea/idea-completion/testData/handlers/basic/AddLabelToReturn.kt.after b/idea/idea-completion/testData/handlers/basic/AddLabelToReturn.kt.after
new file mode 100644
index 00000000000..04307fffee8
--- /dev/null
+++ b/idea/idea-completion/testData/handlers/basic/AddLabelToReturn.kt.after
@@ -0,0 +1,5 @@
+val v: Boolean = run {
+    return@run <caret>true
+}
+
+// ELEMENT: "return@run"
\ No newline at end of file
diff --git a/idea/idea-completion/testData/handlers/basic/ClassKeywordBeforeName.kt b/idea/idea-completion/testData/handlers/basic/ClassKeywordBeforeName.kt
new file mode 100644
index 00000000000..c83ea3652f4
--- /dev/null
+++ b/idea/idea-completion/testData/handlers/basic/ClassKeywordBeforeName.kt
@@ -0,0 +1,4 @@
+cl<caret>interface MyClass
+
+// ELEMENT: "class"
+// CHAR: '\t'
\ No newline at end of file
diff --git a/idea/idea-completion/testData/handlers/basic/ClassKeywordBeforeName.kt.after b/idea/idea-completion/testData/handlers/basic/ClassKeywordBeforeName.kt.after
new file mode 100644
index 00000000000..408077d9804
--- /dev/null
+++ b/idea/idea-completion/testData/handlers/basic/ClassKeywordBeforeName.kt.after
@@ -0,0 +1,4 @@
+class <caret>MyClass
+
+// ELEMENT: "class"
+// CHAR: '\t'
\ No newline at end of file
diff --git a/idea/idea-completion/tests/org/jetbrains/kotlin/idea/completion/test/handlers/BasicCompletionHandlerTestGenerated.java b/idea/idea-completion/tests/org/jetbrains/kotlin/idea/completion/test/handlers/BasicCompletionHandlerTestGenerated.java
index 2989d2ea1e0..65a448eb412 100644
--- a/idea/idea-completion/tests/org/jetbrains/kotlin/idea/completion/test/handlers/BasicCompletionHandlerTestGenerated.java
+++ b/idea/idea-completion/tests/org/jetbrains/kotlin/idea/completion/test/handlers/BasicCompletionHandlerTestGenerated.java
@@ -31,6 +31,12 @@ import java.util.regex.Pattern;
 @TestDataPath("$PROJECT_ROOT")
 @RunWith(JUnit3RunnerWithInners.class)
 public class BasicCompletionHandlerTestGenerated extends AbstractBasicCompletionHandlerTest {
+    @TestMetadata("AddLabelToReturn.kt")
+    public void testAddLabelToReturn() throws Exception {
+        String fileName = KotlinTestUtils.navigationMetadata("idea/idea-completion/testData/handlers/basic/AddLabelToReturn.kt");
+        doTest(fileName);
+    }
+
     public void testAllFilesPresentInBasic() throws Exception {
         KotlinTestUtils.assertAllTestsPresentByMetadata(this.getClass(), new File("idea/idea-completion/testData/handlers/basic"), Pattern.compile("^(.+)\\.kt$"), true);
     }
@@ -53,6 +59,12 @@ public class BasicCompletionHandlerTestGenerated extends AbstractBasicCompletion
         doTest(fileName);
     }
 
+    @TestMetadata("ClassKeywordBeforeName.kt")
+    public void testClassKeywordBeforeName() throws Exception {
+        String fileName = KotlinTestUtils.navigationMetadata("idea/idea-completion/testData/handlers/basic/ClassKeywordBeforeName.kt");
+        doTest(fileName);
+    }
+
     @TestMetadata("ClassWithClassObject.kt")
     public void testClassWithClassObject() throws Exception {
         String fileName = KotlinTestUtils.navigationMetadata("idea/idea-completion/testData/handlers/basic/ClassWithClassObject.kt");