diff --git a/lib/tokenize.cpp b/lib/tokenize.cpp
index fe51596a0..8e2eef274 100644
--- a/lib/tokenize.cpp
+++ b/lib/tokenize.cpp
@@ -6987,9 +6987,10 @@ void Tokenizer::simplifyGoto()
                                 break;
                             --lev;
                         }
-                        if (!roundbraces && tok2->str() == "{") {
+                        else if (!roundbraces && tok2->str() == "{") {
                             ++lev;
-                        } else if (!roundbraces && tok2->str() == "return") {
+                        }
+                        else if (!roundbraces && tok2->str() == "return") {
                             ret = true;
                             if (indentlevel == 1 && lev == 0)
                                 ret2 = true;
@@ -6998,7 +6999,7 @@ void Tokenizer::simplifyGoto()
                         token = token->next();
                         token->linenr(tok2->linenr());
                         token->varId(tok2->varId());
-                        if (ret2 && tok2->str() == ";") {
+                        if (ret2 && roundbraces == 0 && tok2->str() == ";") {
                             break;
                         }
                         if (token->str() == "(") {
diff --git a/test/testsimplifytokens.cpp b/test/testsimplifytokens.cpp
index f4908699d..9ba2c8dcb 100644
--- a/test/testsimplifytokens.cpp
+++ b/test/testsimplifytokens.cpp
@@ -161,10 +161,9 @@ private:
         // Simplify goto..
         TEST_CASE(goto1);
         TEST_CASE(goto2);
-        // ticket #3138
-        TEST_CASE(goto3);
-        // ticket #3459
-        TEST_CASE(goto4);
+        TEST_CASE(goto3);  // #3138
+        TEST_CASE(goto4);  // #3459
+        TEST_CASE(goto5);  // #3705 - return ({asm("");});
 
         //remove dead code after flow control statements
         TEST_CASE(flowControl);
@@ -3225,6 +3224,18 @@ private:
         ASSERT_EQUALS(expected, tok(code));
     }
 
+    void goto5() {
+        const char code[] = "int foo() {\n"
+                            "    goto err;\n"
+                            "err:\n"
+                            "    return ( { __asm__(X); } ); "
+                            "}\n";
+        ASSERT_EQUALS("int foo ( ) {"
+                      " return { asm ( \"X\" ) ; } ;"
+                      " return { asm ( \"X\" ) ; } ; "
+                      "}", tok(code));
+    }
+
     void flowControl() {
         std::list<std::string> beforedead;
         //beforedead.push_back("return");