diff --git a/compiler/src/dotty/tools/dotc/inlines/Inlines.scala b/compiler/src/dotty/tools/dotc/inlines/Inlines.scala
index 2dd86132fb97..3aceec2a5b4e 100644
--- a/compiler/src/dotty/tools/dotc/inlines/Inlines.scala
+++ b/compiler/src/dotty/tools/dotc/inlines/Inlines.scala
@@ -18,6 +18,7 @@ import dotty.tools.dotc.transform.MegaPhase.MiniPhase
 import parsing.Parsers.Parser
 import transform.{PostTyper, Inlining, CrossVersionChecks}
 import staging.StagingLevel
+import cc.CleanupRetains
 
 import collection.mutable
 import reporting.{NotConstant, trace}
@@ -100,18 +101,33 @@ object Inlines:
    *            and body that replace it.
    */
   def inlineCall(tree: Tree)(using Context): Tree = ctx.profiler.onInlineCall(tree.symbol):
-    if tree.symbol.denot != SymDenotations.NoDenotation
-      && tree.symbol.effectiveOwner == defn.CompiletimeTestingPackage.moduleClass
+
+    /** Strip @retains annotations from inferred types in the call tree */
+    val stripRetains = CleanupRetains()
+    val stripper = new TreeTypeMap(
+      treeMap = {
+        case tree: InferredTypeTree =>
+          val stripped = stripRetains(tree.tpe)
+          if stripped ne tree.tpe then tree.withType(stripped)
+          else tree
+        case tree => tree
+      }
+    )
+
+    val tree0 = stripper.transform(tree)
+
+    if tree0.symbol.denot.exists
+      && tree0.symbol.effectiveOwner == defn.CompiletimeTestingPackage.moduleClass
     then
-      if (tree.symbol == defn.CompiletimeTesting_typeChecks) return Intrinsics.typeChecks(tree)
-      if (tree.symbol == defn.CompiletimeTesting_typeCheckErrors) return Intrinsics.typeCheckErrors(tree)
+      if (tree0.symbol == defn.CompiletimeTesting_typeChecks) return Intrinsics.typeChecks(tree0)
+      if (tree0.symbol == defn.CompiletimeTesting_typeCheckErrors) return Intrinsics.typeCheckErrors(tree0)
 
     if ctx.isAfterTyper then
       // During typer we wait with cross version checks until PostTyper, in order
       // not to provoke cyclic references. See i16116 for a test case.
-      CrossVersionChecks.checkRef(tree.symbol, tree.srcPos)
+      CrossVersionChecks.checkRef(tree0.symbol, tree0.srcPos)
 
-    if tree.symbol.isConstructor then return tree // error already reported for the inline constructor definition
+    if tree0.symbol.isConstructor then return tree // error already reported for the inline constructor definition
 
     /** Set the position of all trees logically contained in the expansion of
      *  inlined call `call` to the position of `call`. This transform is necessary
@@ -159,17 +175,17 @@ object Inlines:
         tree
     }
 
-    // assertAllPositioned(tree)   // debug
-    val tree1 = liftBindings(tree, identity)
+    // assertAllPositioned(tree0)   // debug
+    val tree1 = liftBindings(tree0, identity)
     val tree2  =
       if bindings.nonEmpty then
-        cpy.Block(tree)(bindings.toList, inlineCall(tree1))
+        cpy.Block(tree0)(bindings.toList, inlineCall(tree1))
       else if enclosingInlineds.length < ctx.settings.XmaxInlines.value && !reachedInlinedTreesLimit then
         val body =
-          try bodyToInline(tree.symbol) // can typecheck the tree and thereby produce errors
+          try bodyToInline(tree0.symbol) // can typecheck the tree and thereby produce errors
           catch case _: MissingInlineInfo =>
             throw CyclicReference(ctx.owner)
-        new InlineCall(tree).expand(body)
+        new InlineCall(tree0).expand(body)
       else
         ctx.base.stopInlining = true
         val (reason, setting) =
diff --git a/compiler/test/dotty/tools/dotc/CompilationTests.scala b/compiler/test/dotty/tools/dotc/CompilationTests.scala
index 2af2f834db9a..85793e69b9cb 100644
--- a/compiler/test/dotty/tools/dotc/CompilationTests.scala
+++ b/compiler/test/dotty/tools/dotc/CompilationTests.scala
@@ -41,6 +41,7 @@ class CompilationTests {
       compileFile("tests/pos-special/utf8encoded.scala", defaultOptions.and("-encoding", "UTF8")),
       compileFile("tests/pos-special/utf16encoded.scala", defaultOptions.and("-encoding", "UTF16")),
       compileDir("tests/pos-special/i18589", defaultOptions.and("-Wsafe-init").without("-Ycheck:all")),
+      compileDir("tests/pos-special/i24547", defaultOptions.without("-Ycheck:all")),
       // Run tests for legacy lazy vals
       compileFilesInDir("tests/pos", defaultOptions.and("-Wsafe-init", "-Ylegacy-lazy-vals", "-Ycheck-constraint-deps"), FileFilter.include(TestSources.posLazyValsAllowlist)),
       compileDir("tests/pos-special/java-param-names", defaultOptions.withJavacOnlyOptions("-parameters")),
diff --git a/tests/pos-special/i24547/ReproMacro_1.scala b/tests/pos-special/i24547/ReproMacro_1.scala
new file mode 100644
index 000000000000..ac9c2e4948aa
--- /dev/null
+++ b/tests/pos-special/i24547/ReproMacro_1.scala
@@ -0,0 +1,55 @@
+// ReproMacro.scala
+// Minimal macro that reproduces "Coll[Int] is not a legal path" error
+// when creating new ValDefs with types containing @retains annotations
+
+import scala.quoted.*
+
+object ReproMacro:
+
+  transparent inline def transform[A](inline expr: A): A = ${ transformImpl[A]('expr) }
+
+  private def transformImpl[A: Type](expr: Expr[A])(using Quotes): Expr[A] =
+    import quotes.reflect.*
+
+    val term = expr.asTerm
+    val owner = Symbol.spliceOwner
+
+    // Rebuild the block, creating NEW ValDefs with the same types
+    val result = rebuildBlock(term, owner)
+
+    result.asExprOf[A]
+
+  private def rebuildBlock(using Quotes)(term: quotes.reflect.Term, owner: quotes.reflect.Symbol): quotes.reflect.Term =
+    import quotes.reflect.*
+
+    term match
+      case Block(stats, expr) =>
+        var symbolMap = Map.empty[Symbol, Symbol]
+
+        val newStats = stats.map {
+          case vd @ ValDef(name, tpt, Some(rhs)) =>
+            // Create a new symbol with the same type - this causes the error
+            // when tpt.tpe contains AnnotatedType(LazyRef(Coll[Int]), @retains(...))
+            val newSym = Symbol.newVal(owner, name, tpt.tpe, Flags.EmptyFlags, Symbol.noSymbol)
+            symbolMap = symbolMap + (vd.symbol -> newSym)
+            ValDef(newSym, Some(substituteRefs(rhs, symbolMap)))
+          case other => other
+        }
+
+        Block(newStats, substituteRefs(expr, symbolMap))
+
+      case Inlined(call, bindings, expansion) =>
+        Inlined(call, bindings, rebuildBlock(expansion, owner))
+
+      case _ => term
+
+  private def substituteRefs(using Quotes)(term: quotes.reflect.Term, map: Map[quotes.reflect.Symbol, quotes.reflect.Symbol]): quotes.reflect.Term =
+    import quotes.reflect.*
+
+    val mapper = new TreeMap:
+      override def transformTerm(t: Term)(owner: Symbol): Term = t match
+        case Ident(name) if map.contains(t.symbol) =>
+          Ref(map(t.symbol))
+        case _ => super.transformTerm(t)(owner)
+
+    mapper.transformTerm(term)(Symbol.spliceOwner)
diff --git a/tests/pos-special/i24547/ReproTest_2.scala b/tests/pos-special/i24547/ReproTest_2.scala
new file mode 100644
index 000000000000..85226ca26f98
--- /dev/null
+++ b/tests/pos-special/i24547/ReproTest_2.scala
@@ -0,0 +1,19 @@
+// ReproTest.scala
+// Test case: abstract type parameter Coll[Int] with @retains annotation
+// causes "not a legal path" error when macro creates new ValDef
+
+// TODO: there are some other issues with this test case, so it is currently disabled
+// for `Ycheck:all`. We should move it back to `pos-macro` once those issues are fixed.
+
+import scala.collection.IterableOps
+
+def reproTest[Coll[X] <: Iterable[X] & IterableOps[X, Coll, Coll[X]]]: Unit =
+    def xsValues: Coll[Int] = ???
+
+    // The .span method returns (Coll[Int], Coll[Int])
+    // With capture checking, these types get @retains annotations
+    // When the macro creates new ValDefs with these types, compilation fails
+    ReproMacro.transform {
+      val (take, drop) = xsValues.span(???)
+      take.toSeq
+    }