diff --git a/compiler/semexprs.nim b/compiler/semexprs.nim
index cfa34fcdc2..f74a72692b 100644
--- a/compiler/semexprs.nim
+++ b/compiler/semexprs.nim
@@ -787,7 +787,7 @@ proc analyseIfAddressTaken(c: PContext, n: PNode, isOutParam: bool): PNode =
   else:
     result = newHiddenAddrTaken(c, n, isOutParam)
 
-proc analyseIfAddressTakenInCall(c: PContext, n: PNode) =
+proc analyseIfAddressTakenInCall(c: PContext, n: PNode, isConverter = false) =
   checkMinSonsLen(n, 1, c.config)
   const
     FakeVarParams = {mNew, mNewFinalize, mInc, ast.mDec, mIncl, mExcl,
@@ -795,10 +795,15 @@ proc analyseIfAddressTakenInCall(c: PContext, n: PNode) =
       mAppendSeqElem, mNewSeq, mReset, mShallowCopy, mDeepCopy, mMove,
       mWasMoved}
 
+  template checkIfConverterCalled(c: PContext, n: PNode) =
+    ## Checks if there is a converter call which wouldn't be checked otherwise
+    # Call can sometimes be wrapped in a deref
+    let node = if n.kind == nkHiddenDeref: n[0] else: n
+    if node.kind == nkHiddenCallConv:
+      analyseIfAddressTakenInCall(c, node, true)
   # get the real type of the callee
   # it may be a proc var with a generic alias type, so we skip over them
   var t = n[0].typ.skipTypes({tyGenericInst, tyAlias, tySink})
-
   if n[0].kind == nkSym and n[0].sym.magic in FakeVarParams:
     # BUGFIX: check for L-Value still needs to be done for the arguments!
     # note sometimes this is eval'ed twice so we check for nkHiddenAddr here:
@@ -813,6 +818,8 @@ proc analyseIfAddressTakenInCall(c: PContext, n: PNode) =
               discard "allow access within a cast(unsafeAssign) section"
             else:
               localError(c.config, it.info, errVarForOutParamNeededX % $it)
+        # Make sure to still check arguments for converters
+        c.checkIfConverterCalled(n[i])
     # bug #5113: disallow newSeq(result) where result is a 'var T':
     if n[0].sym.magic in {mNew, mNewFinalize, mNewSeq}:
       var arg = n[1] #.skipAddr
@@ -824,15 +831,14 @@ proc analyseIfAddressTakenInCall(c: PContext, n: PNode) =
     return
   for i in 1..<n.len:
     let n = if n.kind == nkHiddenDeref: n[0] else: n
-    if n[i].kind == nkHiddenCallConv:
-      # we need to recurse explicitly here as converters can create nested
-      # calls and then they wouldn't be analysed otherwise
-      analyseIfAddressTakenInCall(c, n[i])
+    c.checkIfConverterCalled(n[i])
     if i < t.len and
         skipTypes(t[i], abstractInst-{tyTypeDesc}).kind in {tyVar}:
-      if n[i].kind != nkHiddenAddr:
-        n[i] = analyseIfAddressTaken(c, n[i], isOutParam(skipTypes(t[i], abstractInst-{tyTypeDesc})))
-
+      # Converters wrap var parameters in nkHiddenAddr but they haven't been analysed yet.
+      # So we need to make sure we are checking them still when in a converter call
+      if n[i].kind != nkHiddenAddr or isConverter:
+        n[i] = analyseIfAddressTaken(c, n[i].skipAddr(), isOutParam(skipTypes(t[i], abstractInst-{tyTypeDesc})))
+        
 include semmagic
 
 proc evalAtCompileTime(c: PContext, n: PNode): PNode =
diff --git a/compiler/sigmatch.nim b/compiler/sigmatch.nim
index 87a4fdf1c7..a1bd5f268e 100644
--- a/compiler/sigmatch.nim
+++ b/compiler/sigmatch.nim
@@ -1979,8 +1979,7 @@ proc userConvMatch(c: PContext, m: var TCandidate, f, a: PType,
       if srca == isSubtype:
         param = implicitConv(nkHiddenSubConv, src, copyTree(arg), m, c)
       elif src.kind in {tyVar}:
-        # Analyse the converter return type
-        arg.sym.flags.incl sfAddrTaken
+        # Analyse the converter return type.
         param = newNodeIT(nkHiddenAddr, arg.info, s.typ[1])
         param.add copyTree(arg)
       else:
diff --git a/tests/converter/t21531.nim b/tests/converter/t21531.nim
new file mode 100644
index 0000000000..b0198684d7
--- /dev/null
+++ b/tests/converter/t21531.nim
@@ -0,0 +1,10 @@
+import std/typetraits
+
+type Foo* = distinct string
+
+converter toBase*(headers: var Foo): var string =
+  headers.distinctBase
+
+proc bar*(headers: var Foo) =
+  for x in headers: discard
+