diff --git a/scripts/setlocalversion b/scripts/setlocalversion
index d105a44b68f6..63d91e22ed7c 100755
--- a/scripts/setlocalversion
+++ b/scripts/setlocalversion
@@ -43,7 +43,8 @@ scm_version()
 	fi
 
 	# Check for git and a git repo.
-	if test -d .git && head=`git rev-parse --verify --short HEAD 2>/dev/null`; then
+	if test -z "$(git rev-parse --show-cdup 2>/dev/null)" &&
+	   head=`git rev-parse --verify --short HEAD 2>/dev/null`; then
 
 		# If we are at a tagged commit (like "v2.6.30-rc6"), we ignore
 		# it, because this version is defined in the top level Makefile.