diff --git a/go.mod b/go.mod
index 0b0143d7d..620c4642e 100644
--- a/go.mod
+++ b/go.mod
@@ -49,3 +49,6 @@ replace k8s.io/client-go => k8s.io/client-go v0.0.0-20191016111102-bec269661e48
 
 // Pin Flux to master branch to break weaveworks/flux circular dependency (to be removed on Flux 1.18)
 replace github.com/fluxcd/flux => github.com/fluxcd/flux v1.17.2-0.20200121140732-3903cf8e71c3
+
+// Patched release of Helm v3.0.3 until https://github.com/helm/helm/pull/7401 is merged
+replace helm.sh/helm/v3 => github.com/hiddeco/helm/v3 v3.0.3-scheme-patched
diff --git a/go.sum b/go.sum
index 88c6c0e55..d782292b9 100644
--- a/go.sum
+++ b/go.sum
@@ -349,6 +349,8 @@ github.com/hashicorp/vault/api v1.0.4/go.mod h1:gDcqh3WGcR1cpF5AJz/B1UFheUEneMoI
 github.com/hashicorp/vault/sdk v0.1.13/go.mod h1:B+hVj7TpuQY1Y/GPbCpffmgd+tSEwvhkWnjtSYCaS2M=
 github.com/hashicorp/yamux v0.0.0-20180604194846-3520598351bb/go.mod h1:+NfK9FKeTrX5uv1uIXGdwYDTeHna2qgaIlx54MXqjAM=
 github.com/hashicorp/yamux v0.0.0-20181012175058-2f1d1f20f75d/go.mod h1:+NfK9FKeTrX5uv1uIXGdwYDTeHna2qgaIlx54MXqjAM=
+github.com/hiddeco/helm/v3 v3.0.3-scheme-patched h1:upWbTZDc4CNQXjDtoFKF+V6pQMLByUl76gkLcoOK2Ek=
+github.com/hiddeco/helm/v3 v3.0.3-scheme-patched/go.mod h1:KBxE6XWO57XSNA1PA9CvVLYRY0zWqYQTad84bNXp1lw=
 github.com/howeyc/gopass v0.0.0-20170109162249-bf9dde6d0d2c/go.mod h1:lADxMC39cJJqL93Duh1xhAs4I2Zs8mKS89XWXFGp9cs=
 github.com/hpcloud/tail v1.0.0 h1:nfCOvKYfkgYP8hkirhJocXT2+zOD8yUNjXaWfTlyFKI=
 github.com/hpcloud/tail v1.0.0/go.mod h1:ab1qPbhIpdTxEkNHXyeSf5vhxWSCs/tWer42PpOxQnU=
@@ -777,9 +779,6 @@ gopkg.in/yaml.v2 v2.2.4 h1:/eiJrUcujPVeJ3xlSWaiNi3uSVmDGBK1pDHUHAnao1I=
 gopkg.in/yaml.v2 v2.2.4/go.mod h1:hI93XBmqTisBFMUTm0b8Fm+jr3Dg1NNxqwp+5A1VGuI=
 gotest.tools v2.2.0+incompatible h1:VsBPFP1AI068pPrMxtb/S8Zkgf9xEmTLJjfM+P5UIEo=
 gotest.tools v2.2.0+incompatible/go.mod h1:DsYFclhRJ6vuDpmuTbkuFWG+y2sxOXAzmJt81HFBacw=
-helm.sh/helm/v3 v3.0.2/go.mod h1:KBxE6XWO57XSNA1PA9CvVLYRY0zWqYQTad84bNXp1lw=
-helm.sh/helm/v3 v3.0.3 h1:FwoMFwq6evEuljmP9s08WPScb/QzVLB6ZXR2P/MZP6c=
-helm.sh/helm/v3 v3.0.3/go.mod h1:KBxE6XWO57XSNA1PA9CvVLYRY0zWqYQTad84bNXp1lw=
 honnef.co/go/tools v0.0.0-20180728063816-88497007e858/go.mod h1:rf3lG4BRIbNafJWhAfAdb/ePZxsR/4RtNHQocxwk9r4=
 honnef.co/go/tools v0.0.0-20190102054323-c2f93a96b099/go.mod h1:rf3lG4BRIbNafJWhAfAdb/ePZxsR/4RtNHQocxwk9r4=
 honnef.co/go/tools v0.0.0-20190106161140-3f1c8253044a/go.mod h1:rf3lG4BRIbNafJWhAfAdb/ePZxsR/4RtNHQocxwk9r4=
diff --git a/test/e2e/15_upgrade.bats b/test/e2e/15_upgrade.bats
index 4e7232a3b..cb5397517 100644
--- a/test/e2e/15_upgrade.bats
+++ b/test/e2e/15_upgrade.bats
@@ -4,6 +4,7 @@ function setup() {
   # Load libraries in setup() to access BATS_* variables
   load lib/env
   load lib/defer
+  load lib/helm
   load lib/install
   load lib/poll
 
@@ -22,12 +23,12 @@ function setup() {
   kubectl create namespace "$DEMO_NAMESPACE"
 }
 
-@test "Git mutation causes upgrade" {
-  # Apply the HelmRelease fixtures
+@test "When a mutation it Git is made, a release is upgraded" {
+  # Apply the HelmRelease fixture
   kubectl apply -f "$FIXTURES_DIR/releases/git.yaml" >&3
 
   # Wait for it to be deployed
-  poll_until_equals 'podinfo-git HelmRelease' 'deployed' "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o 'custom-columns=status:status.releaseStatus' --no-headers"
+  poll_until_equals 'release to be deployed' 'deployed' "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o 'custom-columns=status:status.releaseStatus' --no-headers"
 
   # Clone the charts repository
   local clone_dir
@@ -46,16 +47,16 @@ function setup() {
   git push >&3
 
   # Assert change is rolled out
-  poll_until_equals 'podinfo-git HelmRelease chart update' "successfully cloned chart revision: $head_hash" "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o jsonpath='{.status.conditions[?(@.type==\"ChartFetched\")].message}'"
-  poll_until_equals 'podinfo-git HelmRelease revision matches' "$head_hash" "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o jsonpath='{.status.revision}'"
+  poll_until_equals 'release chart update' "successfully cloned chart revision: $head_hash" "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o jsonpath='{.status.conditions[?(@.type==\"ChartFetched\")].message}'"
+  poll_until_equals 'revision match' "$head_hash" "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o jsonpath='{.status.revision}'"
 }
 
-@test "Git values.yaml change causes upgrade" {
-  # Apply the HelmRelease fixtures
+@test "When a values.yaml change in Git is made, a release is upgraded" {
+  # Apply the HelmRelease fixture
   kubectl apply -f "$FIXTURES_DIR/releases/git.yaml" >&3
 
   # Wait for it to be deployed
-  poll_until_equals 'podinfo-git HelmRelease' 'deployed' "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o 'custom-columns=status:status.releaseStatus' --no-headers"
+  poll_until_equals 'release to be deployed' 'deployed' "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o 'custom-columns=status:status.releaseStatus' --no-headers"
 
   # Clone the charts repository
   local clone_dir
@@ -74,8 +75,43 @@ function setup() {
   git push >&3
 
   # Assert change is rolled out
-  poll_until_equals 'podinfo-git HelmRelease chart update' "successfully cloned chart revision: $head_hash" "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o jsonpath='{.status.conditions[?(@.type==\"ChartFetched\")].message}'"
-  poll_until_equals 'podinfo-git HelmRelease revision matches' "$head_hash" "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o jsonpath='{.status.revision}'"
+  poll_until_equals 'release chart update' "successfully cloned chart revision: $head_hash" "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o jsonpath='{.status.conditions[?(@.type==\"ChartFetched\")].message}'"
+  poll_until_equals 'revision match' "$head_hash" "kubectl -n $DEMO_NAMESPACE get helmrelease/podinfo-git -o jsonpath='{.status.revision}'"
+}
+
+@test "When a HelmRelease is nested in a chart, an upgrade does succeed" {
+  # Install chartmuseum
+  install_chartmuseum chartmuseum_result
+  # shellcheck disable=SC2154
+  local CHARTMUSEUM_URL="http://localhost:${chartmuseum_result[0]}"
+    # Teardown the created port-forward to chartmusem.
+  defer kill "${chartmuseum_result[1]}"
+
+  # Package and upload chart fixture
+  package_and_upload_chart "$FIXTURES_DIR/charts/nested-helmrelease" "$CHARTMUSEUM_URL"
+
+  # Apply the HelmRelease fixture
+  kubectl apply -f "$FIXTURES_DIR/releases/nested-helmrelease.yaml" >&3
+
+  # Wait for it and the child release to be deployed
+  poll_until_equals 'release to be deployed' 'deployed' "kubectl -n $DEMO_NAMESPACE get helmrelease/nested-helmrelease -o 'custom-columns=status:status.releaseStatus' --no-headers"
+  poll_until_equals 'child release to be deployed' 'deployed' "kubectl -n $DEMO_NAMESPACE get helmrelease/nested-helmrelease-child -o 'custom-columns=status:status.releaseStatus' --no-headers"
+
+  releaseGen=$(kubectl -n "$DEMO_NAMESPACE" get helmrelease/nested-helmrelease -o 'custom-columns=status:status.observedGeneration' --no-headers)
+  childReleaseGen=$(kubectl -n "$DEMO_NAMESPACE" get helmrelease/nested-helmrelease -o 'custom-columns=status:status.observedGeneration' --no-headers)
+
+  # Patch release
+  kubectl patch -f "$FIXTURES_DIR/releases/nested-helmrelease.yaml" --type='json' -p='[{"op": "replace", "path": "/spec/values/nested/deeper/deepest/image/tag", "value": "1.1.0"}]' >&3
+
+  # Wait for patch to be processed
+  poll_until_equals 'patch to be processed for release' "$((releaseGen+1))" "kubectl -n $DEMO_NAMESPACE get helmrelease/nested-helmrelease -o 'custom-columns=status:status.observedGeneration' --no-headers"
+  poll_until_equals 'patch to be processed for child release' "$((childReleaseGen+1))" "kubectl -n $DEMO_NAMESPACE get helmrelease/nested-helmrelease -o 'custom-columns=status:status.observedGeneration' --no-headers"
+
+  # Assert successful release
+  releaseStatus=$(kubectl -n "$DEMO_NAMESPACE" get helmrelease/nested-helmrelease -o jsonpath='{.status.conditions[?(@.type=="Released")].reason}')
+  [ "$releaseStatus" = "HelmSuccess" ]
+  childReleaseStatus=$(kubectl -n "$DEMO_NAMESPACE" get helmrelease/nested-helmrelease-child -o jsonpath='{.status.conditions[?(@.type=="Released")].reason}')
+  [ "$childReleaseStatus" = "HelmSuccess" ]
 }
 
 function teardown() {
diff --git a/test/e2e/fixtures/charts/nested-helmrelease/Chart.yaml b/test/e2e/fixtures/charts/nested-helmrelease/Chart.yaml
new file mode 100644
index 000000000..d6cf3e48b
--- /dev/null
+++ b/test/e2e/fixtures/charts/nested-helmrelease/Chart.yaml
@@ -0,0 +1,4 @@
+apiVersion: v1
+description: Nested HelmRelease chart
+name: nested-helmrelease
+version: 0.1.0
diff --git a/test/e2e/fixtures/charts/nested-helmrelease/templates/helmrelease.yaml b/test/e2e/fixtures/charts/nested-helmrelease/templates/helmrelease.yaml
new file mode 100644
index 000000000..31745ffe4
--- /dev/null
+++ b/test/e2e/fixtures/charts/nested-helmrelease/templates/helmrelease.yaml
@@ -0,0 +1,14 @@
+---
+apiVersion: helm.fluxcd.io/v1
+kind: HelmRelease
+metadata:
+  name: {{ .Release.Name }}-child
+  namespace: {{ .Release.Namespace }}
+spec:
+  releaseName: {{ .Release.Name }}-child
+  chart:
+    repository: https://stefanprodan.github.io/podinfo
+    version: 3.2.0
+    name: podinfo
+  values:
+    {{- toYaml .Values.nested.deeper.deepest | nindent 4 }}
diff --git a/test/e2e/fixtures/charts/nested-helmrelease/values.yaml b/test/e2e/fixtures/charts/nested-helmrelease/values.yaml
new file mode 100644
index 000000000..e698335f3
--- /dev/null
+++ b/test/e2e/fixtures/charts/nested-helmrelease/values.yaml
@@ -0,0 +1,6 @@
+nested:
+  deeper:
+    deepest:
+      image:
+        name: some-other-image
+        tag: 1.0.1
diff --git a/test/e2e/fixtures/kustom/base/chartmuseum/chartmuseum.yaml b/test/e2e/fixtures/kustom/base/chartmuseum/chartmuseum.yaml
new file mode 100644
index 000000000..d33c47e95
--- /dev/null
+++ b/test/e2e/fixtures/kustom/base/chartmuseum/chartmuseum.yaml
@@ -0,0 +1,75 @@
+---
+apiVersion: apps/v1
+kind: Deployment
+metadata:
+  labels:
+    name: chartmuseum
+  name: chartmuseum
+spec:
+  replicas: 1
+  selector:
+    matchLabels:
+      name: chartmuseum
+  template:
+    metadata:
+      labels:
+        name: chartmuseum
+    spec:
+      containers:
+      - name: chartmuseum
+        image: chartmuseum/chartmuseum:v0.11.0
+        imagePullPolicy: IfNotPresent
+        env:
+        - name: "LOG_JSON"
+          value: "true"
+        - name: "STORAGE"
+          value: "local"
+        args:
+        - --port=8080
+        - --storage-local-rootdir=/storage
+        livenessProbe:
+          httpGet:
+            path: /health
+            port: http
+          failureThreshold: 3
+          initialDelaySeconds: 5
+          periodSeconds: 10
+          successThreshold: 1
+          timeoutSeconds: 1
+        readinessProbe:
+          httpGet:
+            path: /health
+            port: http
+          failureThreshold: 3
+          initialDelaySeconds: 5
+          periodSeconds: 10
+          successThreshold: 1
+          timeoutSeconds: 1
+        ports:
+        - containerPort: 8080
+          name: http
+          protocol: TCP
+        volumeMounts:
+          - mountPath: /storage
+            name: storage-volume
+      securityContext:
+        fsGroup: 1000
+      volumes:
+      - name: storage-volume
+        emptyDir: {}
+---
+apiVersion: v1
+kind: Service
+metadata:
+  labels:
+    name: chartmuseum
+  name: chartmuseum
+spec:
+  ports:
+    - name: http
+      port: 8080
+      protocol: TCP
+      targetPort: http
+  selector:
+    name: chartmuseum
+  type: ClusterIP
diff --git a/test/e2e/fixtures/kustom/base/chartmuseum/kustomization.yaml b/test/e2e/fixtures/kustom/base/chartmuseum/kustomization.yaml
new file mode 100644
index 000000000..bd8144ead
--- /dev/null
+++ b/test/e2e/fixtures/kustom/base/chartmuseum/kustomization.yaml
@@ -0,0 +1,2 @@
+resources:
+  - chartmuseum.yaml
diff --git a/test/e2e/fixtures/releases/nested-helmrelease.yaml b/test/e2e/fixtures/releases/nested-helmrelease.yaml
new file mode 100644
index 000000000..03efbe10c
--- /dev/null
+++ b/test/e2e/fixtures/releases/nested-helmrelease.yaml
@@ -0,0 +1,19 @@
+---
+apiVersion: helm.fluxcd.io/v1
+kind: HelmRelease
+metadata:
+  name: nested-helmrelease
+  namespace: demo
+spec:
+  releaseName: nested-helmrelease
+  chart:
+    repository: http://chartmuseum:8080
+    name: nested-helmrelease
+    version: 0.1.0
+  values:
+    nested:
+      deeper:
+        deepest:
+          image:
+            name: some-other-image
+            tag: 1.0.1
diff --git a/test/e2e/lib/helm.bash b/test/e2e/lib/helm.bash
new file mode 100644
index 000000000..0bea7b11b
--- /dev/null
+++ b/test/e2e/lib/helm.bash
@@ -0,0 +1,23 @@
+#!/usr/bin/env bash
+
+# shellcheck disable=SC1090
+source "${E2E_DIR}/lib/defer.bash"
+
+function package_and_upload_chart() {
+  local chart=${1}
+  local chart_repository=${2}
+
+  gen_dir=$(mktemp -d)
+  defer rm -rf "'$gen_dir'"
+
+  # Package
+  if [ "$HELM_VERSION" == "v3" ]; then
+    helm3 package --destination "$gen_dir" "$chart"
+  else
+    helm2 package --destination "$gen_dir" "$chart"
+  fi
+
+  # Upload
+  chart_tarbal=$(find "$gen_dir" -type f -name "*.tgz" | head -n1)
+  curl --data-binary "@$chart_tarbal" "$chart_repository/api/charts"
+}
diff --git a/test/e2e/lib/install.bash b/test/e2e/lib/install.bash
index fa5e5af8a..744dec0b9 100644
--- a/test/e2e/lib/install.bash
+++ b/test/e2e/lib/install.bash
@@ -57,9 +57,8 @@ function install_git_srv() {
   local kustomization_dir=${2:-base/gitsrv}
   local gen_dir
   gen_dir=$(mktemp -d)
-
-  ssh-keygen -t rsa -N "" -f "$gen_dir/id_rsa"
   defer rm -rf "'$gen_dir'"
+  ssh-keygen -t rsa -N "" -f "$gen_dir/id_rsa"
   kubectl create secret generic flux-git-deploy \
     --namespace="${E2E_NAMESPACE}" \
     --from-file="${FIXTURES_DIR}/known_hosts" \
@@ -87,8 +86,37 @@ function install_git_srv() {
 }
 
 function uninstall_git_srv() {
-  local secret_name=${1:-flux-git-deploy}
+  local kustomization_dir=${1:-base/gitsrv}
+
   # Silence secret deletion errors since the secret can be missing (deleted by uninstalling Flux)
-  kubectl delete -n "${E2E_NAMESPACE}" secret "$secret_name" &> /dev/null
-  kubectl delete -n "${E2E_NAMESPACE}" -f "${FIXTURES_DIR}/gitsrv.yaml"
+  kubectl delete -n "${E2E_NAMESPACE}" secret flux-git-deploy &> /dev/null
+  kubectl delete -n "${E2E_NAMESPACE}" -k "${FIXTURES_DIR}/kustom/${kustomization_dir}" >&3
+}
+
+function install_chartmuseum() {
+  local external_access_result_var=${1}
+  local kustomization_dir=${2:-base/chartmuseum}
+
+  kubectl apply -n "${E2E_NAMESPACE}" -k "${FIXTURES_DIR}/kustom/${kustomization_dir}" >&3
+
+  # Wait for the chartmuseum to become ready
+  kubectl -n "${E2E_NAMESPACE}" rollout status deployment/chartmuseum
+
+  if [ -n "$external_access_result_var" ]; then
+    local chartmuseum_podname
+    chartmuseum_podname=$(kubectl get pod -n "${E2E_NAMESPACE}" -l name=chartmuseum -o jsonpath="{['items'][0].metadata.name}")
+    coproc kubectl port-forward -n "${E2E_NAMESPACE}" "$chartmuseum_podname" :8080
+    local local_port
+    read -r local_port <&"${COPROC[0]}"-
+    # shellcheck disable=SC2001
+    local_port=$(echo "$local_port" | sed 's%.*:\([0-9]*\).*%\1%')
+    # return the ssh command needed for git, and the PID of the port-forwarding PID into a variable of choice
+    eval "${external_access_result_var}=('$local_port' '$COPROC_PID')"
+  fi
+}
+
+function uninstall_chartmuseum() {
+  local kustomization_dir=${1:-base/chartmuseum}
+
+  kubectl delete -n "${E2E_NAMESPACE}" -k "${FIXTURES_DIR}/kustom/${kustomization_dir}" >&3
 }