diff --git a/pkg/services/sqlstore/dashboard_acl.go b/pkg/services/sqlstore/dashboard_acl.go
index 43c582f6c73..8d3a2455f1f 100644
--- a/pkg/services/sqlstore/dashboard_acl.go
+++ b/pkg/services/sqlstore/dashboard_acl.go
@@ -167,8 +167,10 @@ func GetDashboardAclInfoList(query *m.GetDashboardAclInfoListQuery) error {
 			'' as user_login,
 			'' as user_email,
 			'' as user_group
-			FROM dashboard_acl as da, dashboard as dash
-			WHERE dash.id = ? AND dash.has_acl = 0 AND da.dashboard_id = -1
+			FROM dashboard_acl as da,
+        dashboard as dash
+        LEFT JOIN dashboard folder on dash.folder_id = folder.id
+			WHERE dash.id = ? AND (dash.has_acl = 0 or folder.has_acl = 0) AND da.dashboard_id = -1
 	`
 
 	query.Result = make([]*m.DashboardAclInfoDTO, 0)
diff --git a/pkg/services/sqlstore/dashboard_acl_test.go b/pkg/services/sqlstore/dashboard_acl_test.go
index 252d85368a3..55f4b24808b 100644
--- a/pkg/services/sqlstore/dashboard_acl_test.go
+++ b/pkg/services/sqlstore/dashboard_acl_test.go
@@ -25,6 +25,22 @@ func TestDashboardAclDataAccess(t *testing.T) {
 				So(err, ShouldEqual, m.ErrDashboardAclInfoMissing)
 			})
 
+			Convey("Given dashboard folder with default permissions", func() {
+				Convey("When reading dashboard acl should include acl for parent folder", func() {
+					query := m.GetDashboardAclInfoListQuery{DashboardId: childDash.Id, OrgId: 1}
+
+					err := GetDashboardAclInfoList(&query)
+					So(err, ShouldBeNil)
+
+					So(len(query.Result), ShouldEqual, 2)
+					defaultPermissionsId := -1
+					So(query.Result[0].DashboardId, ShouldEqual, defaultPermissionsId)
+					So(*query.Result[0].Role, ShouldEqual, m.ROLE_VIEWER)
+					So(query.Result[1].DashboardId, ShouldEqual, defaultPermissionsId)
+					So(*query.Result[1].Role, ShouldEqual, m.ROLE_EDITOR)
+				})
+			})
+
 			Convey("Given dashboard folder permission", func() {
 				err := SetDashboardAcl(&m.SetDashboardAclCommand{
 					OrgId:       1,
@@ -66,6 +82,31 @@ func TestDashboardAclDataAccess(t *testing.T) {
 				})
 			})
 
+			Convey("Given child dashboard permission in folder with no permissions", func() {
+				err := SetDashboardAcl(&m.SetDashboardAclCommand{
+					OrgId:       1,
+					UserId:      currentUser.Id,
+					DashboardId: childDash.Id,
+					Permission:  m.PERMISSION_EDIT,
+				})
+				So(err, ShouldBeNil)
+
+				Convey("When reading dashboard acl should include default acl for parent folder and the child acl", func() {
+					query := m.GetDashboardAclInfoListQuery{OrgId: 1, DashboardId: childDash.Id}
+
+					err := GetDashboardAclInfoList(&query)
+					So(err, ShouldBeNil)
+
+					defaultPermissionsId := -1
+					So(len(query.Result), ShouldEqual, 3)
+					So(query.Result[0].DashboardId, ShouldEqual, defaultPermissionsId)
+					So(*query.Result[0].Role, ShouldEqual, m.ROLE_VIEWER)
+					So(query.Result[1].DashboardId, ShouldEqual, defaultPermissionsId)
+					So(*query.Result[1].Role, ShouldEqual, m.ROLE_EDITOR)
+					So(query.Result[2].DashboardId, ShouldEqual, childDash.Id)
+				})
+			})
+
 			Convey("Should be able to add dashboard permission", func() {
 				setDashAclCmd := m.SetDashboardAclCommand{
 					OrgId:       1,
diff --git a/public/app/features/dashboard/acl/acl.ts b/public/app/features/dashboard/acl/acl.ts
index 492320fce80..d7d79efb9a0 100644
--- a/public/app/features/dashboard/acl/acl.ts
+++ b/public/app/features/dashboard/acl/acl.ts
@@ -50,7 +50,7 @@ export class AclCtrl {
   }
 
   prepareViewModel(item: DashboardAcl): DashboardAcl {
-    item.inherited = this.dashboard.id !== item.dashboardId;
+    item.inherited = !this.dashboard.meta.isFolder && this.dashboard.id !== item.dashboardId;
     item.sortRank = 0;
 
     if (item.userId > 0) {
@@ -138,6 +138,10 @@ export class AclCtrl {
   }
 
   isDuplicate(origItem, newItem) {
+    if (origItem.inherited) {
+      return false;
+    }
+
     return (origItem.role && newItem.role && origItem.role === newItem.role) ||
     (origItem.userId && newItem.userId && origItem.userId === newItem.userId) ||
     (origItem.userGroupId && newItem.userGroupId && origItem.userGroupId === newItem.userGroupId);
diff --git a/public/app/features/dashboard/acl/specs/acl_specs.ts b/public/app/features/dashboard/acl/specs/acl_specs.ts
index 99a5cfd2339..479db4b4de9 100644
--- a/public/app/features/dashboard/acl/specs/acl_specs.ts
+++ b/public/app/features/dashboard/acl/specs/acl_specs.ts
@@ -9,7 +9,7 @@ describe('AclCtrl', () => {
   };
 
   const dashboardSrv = {
-    getCurrent: sinon.stub().returns({id: 1})
+    getCurrent: sinon.stub().returns({id: 1, meta: { isFolder: false }})
   };
 
   beforeEach(angularMocks.module('grafana.core'));
@@ -130,7 +130,7 @@ describe('AclCtrl', () => {
       backendSrv.post.reset();
       ctx.ctrl.items = [];
 
-     const userGroupItem = {
+      const userGroupItem = {
         id: 2,
         name: 'ug1',
       };
@@ -147,4 +147,34 @@ describe('AclCtrl', () => {
       expect(ctx.ctrl.items.length).to.eql(1);
     });
   });
+
+  describe('when one inherited and one not inherited user group permission are added', () => {
+    beforeEach(() => {
+      backendSrv.get.reset();
+      backendSrv.post.reset();
+      ctx.ctrl.items = [];
+
+      const inheritedUserGroupItem = {
+        id: 2,
+        name: 'ug1',
+        dashboardId: -1
+      };
+
+      ctx.ctrl.items.push(inheritedUserGroupItem);
+
+      const userGroupItem = {
+        id: 2,
+        name: 'ug1',
+      };
+      ctx.ctrl.groupPicked(userGroupItem);
+    });
+
+    it('should not throw a validation error', () => {
+      expect(ctx.ctrl.error).to.eql('');
+    });
+
+    it('should add both permissions', () => {
+      expect(ctx.ctrl.items.length).to.eql(2);
+    });
+  });
 });