diff --git a/include/pybind11/detail/smart_holder_type_casters.h b/include/pybind11/detail/smart_holder_type_casters.h
index 5e0f791c3..2b96512b1 100644
--- a/include/pybind11/detail/smart_holder_type_casters.h
+++ b/include/pybind11/detail/smart_holder_type_casters.h
@@ -715,7 +715,11 @@ struct smart_holder_type_caster : smart_holder_type_caster_load<T>,
 
     static handle cast(T *src, return_value_policy policy, handle parent) {
         if (policy == return_value_policy::_clif_automatic) {
-            policy = return_value_policy::reference;
+            if (parent) {
+                policy = return_value_policy::reference_internal;
+            } else {
+                policy = return_value_policy::reference;
+            }
         }
         return cast(const_cast<T const *>(src), policy, parent); // Mutbl2Const
     }
diff --git a/tests/test_return_value_policy_override.cpp b/tests/test_return_value_policy_override.cpp
index 5d6a51b7c..a61bec1ba 100644
--- a/tests/test_return_value_policy_override.cpp
+++ b/tests/test_return_value_policy_override.cpp
@@ -2,10 +2,37 @@
 
 #include "pybind11_tests.h"
 
+#include <vector>
+
 namespace test_return_value_policy_override {
 
 struct some_type {};
 
+struct data_field {
+    int value = -99;
+
+    explicit data_field(int v) : value(v) {}
+};
+
+struct data_fields_holder {
+    std::vector<data_field> vec;
+
+    explicit data_fields_holder(std::size_t vec_size) {
+        for (std::size_t i = 0; i < vec_size; i++) {
+            vec.emplace_back(13 + static_cast<int>(i) * 11);
+        }
+    }
+
+    data_field *vec_at(std::size_t index) {
+        if (index >= vec.size()) {
+            return nullptr;
+        }
+        return &vec[index];
+    }
+
+    const data_field *vec_at_const_ptr(std::size_t index) { return vec_at(index); }
+};
+
 // cp = copyable, mv = movable, 1 = yes, 0 = no
 struct type_cp1_mv1 {
     std::string mtxt;
@@ -156,6 +183,8 @@ std::unique_ptr<type_cp0_mv0> return_unique_pointer_nocopy_nomove() {
 
 } // namespace test_return_value_policy_override
 
+using test_return_value_policy_override::data_field;
+using test_return_value_policy_override::data_fields_holder;
 using test_return_value_policy_override::some_type;
 using test_return_value_policy_override::type_cp0_mv0;
 using test_return_value_policy_override::type_cp0_mv1;
@@ -205,6 +234,8 @@ struct type_caster<some_type> : type_caster_base<some_type> {
 } // namespace detail
 } // namespace pybind11
 
+PYBIND11_SMART_HOLDER_TYPE_CASTERS(data_field)
+PYBIND11_SMART_HOLDER_TYPE_CASTERS(data_fields_holder)
 PYBIND11_SMART_HOLDER_TYPE_CASTERS(type_cp1_mv1)
 PYBIND11_SMART_HOLDER_TYPE_CASTERS(type_cp0_mv1)
 PYBIND11_SMART_HOLDER_TYPE_CASTERS(type_cp1_mv0)
@@ -239,6 +270,21 @@ TEST_SUBMODULE(return_value_policy_override, m) {
         },
         py::return_value_policy::_clif_automatic);
 
+    py::classh<data_field>(m, "data_field").def_readwrite("value", &data_field::value);
+    py::classh<data_fields_holder>(m, "data_fields_holder")
+        .def(py::init<std::size_t>())
+        .def("vec_at",
+             [](const py::object &self_py, std::size_t index) {
+                 auto *self = py::cast<data_fields_holder *>(self_py);
+                 return py::cast(
+                     self->vec_at(index), py::return_value_policy::_clif_automatic, self_py);
+             })
+        .def("vec_at_const_ptr", [](const py::object &self_py, std::size_t index) {
+            auto *self = py::cast<data_fields_holder *>(self_py);
+            return py::cast(
+                self->vec_at_const_ptr(index), py::return_value_policy::_clif_automatic, self_py);
+        });
+
     py::classh<type_cp1_mv1>(m, "type_cp1_mv1")
         .def(py::init<std::string>())
         .def_readonly("mtxt", &type_cp1_mv1::mtxt);
diff --git a/tests/test_return_value_policy_override.py b/tests/test_return_value_policy_override.py
index 27c769421..213f9c20e 100644
--- a/tests/test_return_value_policy_override.py
+++ b/tests/test_return_value_policy_override.py
@@ -17,6 +17,21 @@ def test_return_pointer():
     assert m.return_pointer_with_policy_clif_automatic() == "_clif_automatic"
 
 
+def test_persistent_holder():
+    h = m.data_fields_holder(2)
+    assert h.vec_at(0).value == 13
+    assert h.vec_at(1).value == 24
+    assert h.vec_at_const_ptr(0).value == 13
+    assert h.vec_at_const_ptr(1).value == 24
+
+
+def test_temporary_holder():
+    data_field = m.data_fields_holder(2).vec_at(1)
+    assert data_field.value == 24
+    data_field = m.data_fields_holder(2).vec_at_const_ptr(1)
+    assert data_field.value == 24
+
+
 @pytest.mark.parametrize(
     ("func", "expected"),
     [