diff --git a/compiler/src/dotty/tools/dotc/parsing/Parsers.scala b/compiler/src/dotty/tools/dotc/parsing/Parsers.scala
index 40c90bc25e3c..5ba66efae628 100644
--- a/compiler/src/dotty/tools/dotc/parsing/Parsers.scala
+++ b/compiler/src/dotty/tools/dotc/parsing/Parsers.scala
@@ -1419,6 +1419,11 @@ object Parsers {
     private def getFunction(tree: Tree): Option[Function] = tree match {
       case Parens(tree1) => getFunction(tree1)
       case Block(Nil, tree1) => getFunction(tree1)
+      case Function(_, _: CapturesAndResult) =>
+        // A function tree like this will be desugared
+        // into a capturing type in the typer,
+        // so None is returned.
+        None
       case t: Function => Some(t)
       case _ => None
     }
diff --git a/tests/neg-custom-args/captures/i18518.scala b/tests/neg-custom-args/captures/i18518.scala
new file mode 100644
index 000000000000..61e63a54141c
--- /dev/null
+++ b/tests/neg-custom-args/captures/i18518.scala
@@ -0,0 +1,5 @@
+import language.experimental.captureChecking
+type Foo1 = [R] -> (x: Unit) ->{} Unit  // error
+type Foo2 = [R] -> (x: Unit) ->{cap} Unit  // error
+type Foo3 = (c: Int^) -> [R] -> (x: Unit) ->{c} Unit  // error
+type Foo4 = (c: Int^) -> [R] -> (x0: Unit) -> (x: Unit) ->{c} Unit