diff --git a/plugins/uast-kotlin/src/org/jetbrains/uast/kotlin/internal/kotlinInternalUastUtils.kt b/plugins/uast-kotlin/src/org/jetbrains/uast/kotlin/internal/kotlinInternalUastUtils.kt
index 4cd8bc298cb..57f0eac6dc0 100644
--- a/plugins/uast-kotlin/src/org/jetbrains/uast/kotlin/internal/kotlinInternalUastUtils.kt
+++ b/plugins/uast-kotlin/src/org/jetbrains/uast/kotlin/internal/kotlinInternalUastUtils.kt
@@ -30,7 +30,10 @@ import com.intellij.psi.util.PsiTypesUtil
 import org.jetbrains.kotlin.asJava.toLightClass
 import org.jetbrains.kotlin.asJava.toLightElements
 import org.jetbrains.kotlin.codegen.signature.BothSignatureWriter
+import org.jetbrains.kotlin.descriptors.ClassDescriptor
 import org.jetbrains.kotlin.descriptors.DeclarationDescriptor
+import org.jetbrains.kotlin.descriptors.FunctionDescriptor
+import org.jetbrains.kotlin.descriptors.PropertyDescriptor
 import org.jetbrains.kotlin.load.kotlin.TypeMappingMode
 import org.jetbrains.kotlin.psi.*
 import org.jetbrains.kotlin.resolve.BindingContext
@@ -78,6 +81,8 @@ internal fun KotlinType.toPsiType(source: UElement, element: KtElement, boxed: B
         if (psiType != null) return psiType
     }
 
+    if (this.containsLocalTypes()) return UastErrorType
+
     val project = element.project
     val typeMapper = ServiceManager.getService(project, KotlinUastBindingContextProviderService::class.java)
             .getTypeMapper(element) ?: return UastErrorType
@@ -95,6 +100,22 @@ internal fun KotlinType.toPsiType(source: UElement, element: KtElement, boxed: B
     return ClsTypeElementImpl(source.getParentOfType<UDeclaration>(false)?.psi ?: element, typeText, '\u0000').type
 }
 
+private fun KotlinType.containsLocalTypes(): Boolean {
+    val typeDeclarationDescriptor = this.constructor.declarationDescriptor
+    if (typeDeclarationDescriptor is ClassDescriptor) {
+        val containerDescriptor = typeDeclarationDescriptor.containingDeclaration
+        if (containerDescriptor is PropertyDescriptor || containerDescriptor is FunctionDescriptor) {
+            return true
+        }
+    }
+
+    if (arguments.any { it.type.containsLocalTypes() }) {
+        return true
+    }
+
+    return false
+}
+
 internal fun KtTypeReference?.toPsiType(source: UElement, boxed: Boolean = false): PsiType {
     if (this == null) return UastErrorType
     return (analyze()[BindingContext.TYPE, this] ?: return UastErrorType).toPsiType(source, this, boxed)